The validity of the monetary approach to the Drachma/ECU exchange rate determination is investigated through cointegration, impulse response and variance decomposition analysis. The empirical results reported confirm recent findings that the monetary approach may be interpreted as a long-run...

Between 1994 and 1997, UK monetary policy decisions were taken by the Minister of Finance, but the advice of the central bank was published with a short delay. Thus, the financial markets could observe when the political authority took the same view as the monetary authority and when it did not,...