Interpreting the ERM Crisis: Country-Specific and Systemic Issues

Willem Buiter, Giancarlo Corsetti and Paolo Pesenti

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Most interpretations of the Exchange Rate Mechanism crisis in 1992-93 ignore the key role played by structural policy spillovers among European countries, and overlook the effects of coordination (or lack thereof) of monetary and exchange rate policies among the countries making up the periphery of the system. This paper provides a simple analytical framework, able to encompass the recent literature on currency crises, while developing it by bringing out the decisive role of the strategic interactions among national policy makers in a multi-country monetary and exchange rate game. In contrast to an approach that focuses exclusively on country-specific issues, a systemic view is ultimately able to unravel more coherently, and more convincingly, the "puzzles" of the ERM crisis.

Date: 1997-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://cep.lse.ac.uk/pubs/download/DP0321.pdf (application/pdf)

Related works:
Working Paper: Interpreting the ERM Crisis: Country-Specific and Systemic Issues (1998)
Working Paper: Interpreting the ERM crisis: country-specific and systemic issues (1997)
Working Paper: Interpreting the ERM Crisis: Country-Specific and Systemic Issues (1996)
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:cep:cepdps:dp0321

Access Statistics for this paper

More papers in CEP Discussion Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().