EXCHANGE RATE‐BASED STABILIZATION IN WESTERN EUROPE: GREECE, IRELAND, ITALY, AND PORTUGAL

Enrica Detragiache () and A. Javier Hamann ()

Contemporary Economic Policy, 1999, vol. 17, issue 3, 358-369

Abstract: This paper reviews the experience with exchange rate‐based stabilization of four Western European countries–Italy, Ireland, Portugal, and Greece–in 1980–1996 and compares it with the experience of high‐inflation developing countries. We find that inflation stabilization was contractionary, in contrast with the expansionary cycle observed in high‐inflation countries, although some real exchange rate appreciation took place. Also, frequent adjustments of the exchange rate peg or even its abandonment did not lead to a resumption of inflation, so stabilization programs were successful in all four countries. (JEL E31, F41)

Date: 1999
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https://doi.org/10.1111/j.1465-7287.1999.tb00688.x

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Working Paper: Exchange Rate-Based Stabilization in Western Europe: Greece, Ireland, Italy and Portugal (1997)
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