Currency substitution has important implications for the cost of European monetary union--if it is significant it will help to reduce costs of convergence to a single currency. This paper informs the policy debate by testing for its existence on a consistent European database making use of...

This paper identifies four principal econometric approaches to the estimation and testing of asset market models of exchange rate determination: the traditional, static reduced-form approach; the error correction and cointegration, dynamic reduced-form approaches; the simultaneous equations...

The authors examine changes in the economic performance of Western European regional economies, in particular, the degree of convergence in their economic performance (as measured by the growth of GDP per capita) since the mid-1970s when the larger European Union was established. Although...

In this paper we examine the relationship between the term structure of interest rates for six major European Union countries, to discover if the Exchange Rate Mechanism has lead to a converging of domestic term structures. We test this hypothesis using a model of international interest rate...