The paper presents estimates of a model of the credibility of the U.K. commitment to its central parity against the deutsch mark during the period of ERM membership (1990-92). The measure of credibility used is the long term, interest differential with Germany. Credibility is decomposed into two...

In this paper the authors calculate OCA-indexes for industrial countries in an effort to estimate the benefit-cost ratio of adopting a common currency. The results correspond to the estimation of Bayoumi and Eichengreen (1997b) and show that the ranking of the economies suitable to form a...