Exchange Rate Variability Inside and Outside the EMU

Lennart Bergbom
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Lennart Bergbom: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

No 1998:26, Working Paper Series from Uppsala University, Department of Economics

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 variability; EMU; asymmetric shocks (search for similar items in EconPapers)
JEL-codes: F31 F33 F36 F41 (search for similar items in EconPapers)
Pages: 48 pages
Date: 1998-12-08
New Economics Papers: this item is included in nep-eec, nep-ifn and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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