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Interpreting the ERM Crisis: Country-Specific and Systemic Issues

Buiter, Willem H.; Corsetti, Giancarlo; Pesenti, Paolo - C.E.P.R. Discussion Papers - 1996

Most interpretations of the Exchange Rate Mechanism crisis of 1992/3 ignore the key role played by structural policy spillovers among European countries, and overlook the effects of coordination (or lack thereof) of monetary and exchange rate policies among the countries making up the periphery...

Persistent link: https://www.econbiz.de/10005123505

Optimal Target Zones: How an Exchange Rate Mechanism Can Improve Upon Discretion

Miller, Marcus; Zhang, Lei - C.E.P.R. Discussion Papers - 1994

Using Krugman's (1991) target zone model, we find an explicit, sub-game perfect solution for a central bank wishing to stabilize the exchange rate given proportional costs of intervention. We demonstrate, however, that precommitment to narrower bands would yield a welfare gain - which provides a...

Persistent link: https://www.econbiz.de/10005123571

Fixed Exchange Rates as a Means to Price Stability: What Have We Learned?

Svensson, Lars E O - C.E.P.R. Discussion Papers - 1994

This paper discusses what we have learned from last year's currency crises in the ERM and Nordic countries about fixed exchange rates as a means to achieve price stability. After discussing the explanations for the crises, the paper concludes that fixed exchange rates are not a short cut to...

Persistent link: https://www.econbiz.de/10005067493

Stage Two: Feasible Transitions to EMU

Artis, Michael J - C.E.P.R. Discussion Papers - 1994

This paper addresses the issue of the transition from Stage Two of EMU to Stage Three. The criteria established in the Maastricht Treaty for this transition include an ERM qualification. Under this criterion a participating country would have had to maintain its position in the normal bands of...

Persistent link: https://www.econbiz.de/10005497747

Looking for Contagion: the Evidence from the ERM

Favero, Carlo A.; Giavazzi, Francesco - C.E.P.R. Discussion Papers - 2000

This paper applies a full-information technique to test for the presence of contagion across the money markets of ERM … members. We show that whenever it is possible to estimate a model for interdependence, a test for contagion based o a full … information technique is more powerful. We test for the presence of contagion after having identified episodes of country …

Persistent link: https://www.econbiz.de/10005123753

Speculative Market Structure and the Collapse of an Exchange Rate Mechanism

Chen, Zhaohui - C.E.P.R. Discussion Papers - 1995

A salient feature of recent currency speculations in the European Exchange Rate Mechanism is that the speculators can be big strategic players in the market, along with the central bank. This paper develops a game-theoretic model that captures this feature of the speculative market. For a regime...

Persistent link: https://www.econbiz.de/10005114274

Macroeconomic Shocks, the ERM, and Tri-Polarity

Bayoumi, Tamim; Taylor, Mark P - C.E.P.R. Discussion Papers - 1992

We analyse the importance of ERM membership for macroeconomic performance by comparing the behaviour of real output growth and inflation of members and non-members of the ERM. Taking the traditional aggregate supply and demand model as the basis for the analysis, we propose and implement an...

Persistent link: https://www.econbiz.de/10005792086

Asymmetry in the ERM: A Case Study of French and German Interest Rates Since Basel-Nyborg

Gardner, Edward H; Perraudin, William - C.E.P.R. Discussion Papers - 1993

We study empirically daily French and German interest rate changes since the Basel-Nyborg agreement of September 1987. In particular, we ask whether the shock associated with German unification altered the degree of leadership of German monetary policy in the ERM. We conclude that Germany's...

Persistent link: https://www.econbiz.de/10005067378