Exchange Rate Variability Inside and Outside the EMU

An often heard view is that exchange rate variability will decrease for a country that joins the EMU. This is not necessarily true. Both real and nominal exchange rate variability increase under certain circumstances when asymmetric demand shocks occur inside or outside the union. These results are obtained theoretically within a standard international macro-model but they also remain valid in a numerical simulation of this model.

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Year of publication:	1998
Authors:	Bergbom, Lennart
Publisher:	Uppsala : Uppsala University, Department of Economics
Subject:	Exchange rate variability \| EMU \| asymmetric shocks

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Series:	Working Paper ; 1998:26
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	877974098 [GVK] hdl:10419/82934 [Handle] RePEc:hhs:uunewp:1998_026 [RePEc]
Classification:	F31 - Foreign Exchange ; F33 - International Monetary Arrangements and Institutions ; F36 - Financial Aspects of Economic Integration ; F41 - Open Economy Macroeconomics
Source:	EconStor

Persistent link: https://www.econbiz.de/10010321810