There is only a sparse literature on the determination of real exchange rate volatility, and little attention has been given to the possible impact of EMU on volatility of real exchange rates of EU countries. A number of papers suggest a negative impact of exchange rate volatility on investment...

High oil prices have been associated with bouts of inflation and economic instability over the last 30 years. Consequently, the rise of oil prices in recent months has generated concern. We argue that the inflationary consequences of a rise in oil prices depend upon the policy response of the...