Realignment expectations which measure exchange rate credibility are analyzed for European exchange rates, using daily … expectations and macroeconomic variables, although there are signs that lower inflation improves credibility. Statistically, many … movements to realignment expectations are common to ERM participants. There were few indications of poor ERM credibility before …

Realignment expectations which measure exchange rate credibility are analyzed for European exchange rates, using daily … expectations and macroeconomic variables, although there are signs that lower inflation improves credibility. Statistically, many … movements to realignment expectations are common to ERM participants. There were few indications of poor ERM credibility before …