Exchange Rate Variability Inside and Outside the EMU

L. Bergbom

Working Papers from Uppsala - Working Paper Series

Abstract: An often heard view is that exchange rate variability will decrease for a country that joins the EMU. This is not necessarily true. Both real and nominal exchange rate variability increase under certain circumstances when asymmetric demand shocks occur inside or outside the union. These results are obtained theoretically within a standard international macro-model but they also remain valid in a numerical simulation of this model.

Keywords: EXCHANGE RATE; ECONOMIC INTEGRATION; FINANCIAL MARKET (search for similar items in EconPapers)
JEL-codes: F31 F33 F36 F41 (search for similar items in EconPapers)
Pages: 48 pages
Date: 1998
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:uppaal:1998:26

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