Asymmetry in the ERM: A Case Study of French and German Interest Rates Before and After German Unification

Edward H. Gardner and William Perraudin
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Edward H. Gardner: International Monetary Fund

IMF Staff Papers, 1993, vol. 40, issue 2, 427-450

Abstract: Daily French and German interest rate changes since the Basle-Nyborg agreement of September 1987 are examined empirically. In particular, it is asked whether the shock associated with German unification altered the degree of leadership of German monetary policy in the exchange rate mechanism (ERM). The paper finds that Germany's leadership role within the ERM largely disappeared in the year following unification but that the Bundesbank began reasserting its predominance thereafter.

JEL-codes: E43 E52 E58 F31 F33 F36 (search for similar items in EconPapers)
Date: 1993
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