THE ACCURACY OF REPORTS OF FOREIGN-EXCHANGE INTERVENTION

This paper considers both qualitative and quantitative evidence on the accuracy of press reports of foreign exchange intervention by the Fed eral Reserve between January 1985 and December 1989. The evidence show s that the likelihood of intervention being reported given that it act ually occurred was 72 per cent and that the likelihood of intervention actually occurring given that it was reported was 88 per cent. Interv entions which were reported were larger on average than those which we re not reported and this difference is statistically significant. Mult inomial logit analysis also demonstrates that the likelihood of interv ention being reported increased with the size of the intervention. (JE L F31).