Exchange Rates, Policy Convergence and the European Monetary System

Ronald MacDonald and Mark Taylor

No 444, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: In this paper we use a recently developed multivariate cointegration technique to analyse the degree of policy convergence of EMS member relative to that of some non-EMS countries. Interestingly, we find convergence for the nominal and real exchange rates and money supplies of the EMS members but not for the non-EMS countries. We also provide some evidence to support the `German leadership hypothesis' in the context of intra-EMS monetary policy convergence, which accords with anecdotal evidence on the modus operandi of the EMS.

Keywords: European Monetary System; Exchange Rates; Policy Convergence (search for similar items in EconPapers)
Date: 1990-08
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Related works:
Journal Article: Exchange Rates, Policy Convergence, and the European Monetary System (1991)
Working Paper: EXCHANGE RATES, POLICY CONVERGENCE AND THE EUROPEAN MONETARY SYSTEM
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