The Effect of the ERMon Participating Economies
Summary:
The effect of membership of the ERM on macroeconomic performance is analyzed using vector autoregression techniques. The results indicate that while the ERM has had little effect on the nature of the shocks hitting the economies, it has had a significant effect on the response of member countries to these shocks. In addition, long-time members of the ERM have significantly more correlated shocks than other countries. These results conform to the thesis that the ERM represents a move by countries with relatively similar underlying shocks to coordinate macroeconomic policy.
Series:
Working Paper No. 1991/086
Subject:
Conventional peg Economic theory Exchange rate arrangements Exchange rate flexibility Floating exchange rates Foreign exchange Supply shocks
Notes:
Also published in Staff Papers, Vol. 39, No. 2, June 1992.
English
Publication Date:
September 1, 1991
ISBN/ISSN:
9781451953725/1018-5941
Stock No:
WPIEA0861991
Pages:
36
Please address any questions about this title to publications@imf.org