How to Fix Conversion Rates at the Start of EMU

Paul De Grauwe

No 1530, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper analyses several procedures for fixing conversion rates at the start of EMU. One consists of announcing a fixed conversion rate; a second (proposed by Lalmfalussy) would announce that the conversion rate will be an average of past market exchange rates; and a third involves announcing that the market exchange rate observed just prior to entry will be the conversion rate. The paper evaluates these different procedures and concludes that the Lamfalussy rule is unattractive compared to the two other alternatives.

Keywords: Exchange Rate; Maastricht Treaty; Monetary Integration (search for similar items in EconPapers)
JEL-codes: F33 F36 F42 (search for similar items in EconPapers)
Date: 1996-11
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Citations: View citations in EconPapers (25)

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