Exchange Rate Regime and Economic Activity in the EU

Stephan Schulmeister

Austrian Economic Quarterly, 1996, vol. 1, issue 2, 85-95

Abstract: Since the collapse of the Exchange Rate Mechanism of the European Monetary System in 1992-1993 the monetary setting for trade and investment has changed fundamentally. After six years of stable exchange rates the EU split into a hard-currency block under the "leadership" of the German Bundesbank and the soft-currency countries. Over the period from 1992 to 1995 the real effective exchange rate in Germany, France, the Netherlands, Belgium, Denmark, and Austria rose by an average of 3 percent annually, while the exchange rate in the remaining EU countries fell by 6 percent annually in real terms. At the same time economies whose currencies had lost in value managed to expand real exports 9 percent per year, whereas in hard-currency countries real exports attained a growth rate of only 3 percent. As unit labor costs in the soft-currency countries have not risen faster than in the hard-currency block, the exchange rate fluctuations recorded since 1992 should continue to influence Europe's real economic development in the near future.

Keywords: Exchange; Rate; Regime; and; Economic; Activity; in; the; EU (search for similar items in EconPapers)
Date: 1996
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.wifo.ac.at/wwa/pubid/312 abstract (text/html)
Payment required

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wfo:wquart:y:1996:i:2:p:85-95

Access Statistics for this article

More articles in Austrian Economic Quarterly from WIFO Contact information at EDIRC.
Bibliographic data for series maintained by Florian Mayr ().