The D-Mark Exchange Rate Impact

Reiner König

Chapter 2 in The German Currency Union of 1990, 1997, pp 13-35 from Palgrave Macmillan

Abstract: Abstract German unification is not a purely intra-German process. Its impact spreads to other countries as well in multifarious ways. Economically speaking, unification was an exogenous shock which primarily affected Germany itself, but whose impact did not stop at the German borders. The changes that occurred were registered with particular attention in the foreign exchange market, a market in which every country must continuously subject itself and its currency to the test of market forces. Experience shows that weaknesses and strengths of the economy and economic policy are reflected rapidly and perceptibly in the exchange rate, which responds to economic tremors like a seismograph. The assessment of a country under the international spotlight is crystallised in its exchange rate.

Keywords: Exchange Rate; Monetary Policy; Current Account; European Monetary Union; Foreign Exchange Market (search for similar items in EconPapers)
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-25368-5_2

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DOI: 10.1007/978-1-349-25368-5_2

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