 Characteristics of the Euro, the Demand for Reserves, and Policy Coordination Under EMUPaul Masson and Bart Turtelboom No 1997/058, IMF Working Papers from International Monetary Fund Abstract: The success of European Economic and Monetary Union (EMU) will depend on the stability of the euro. The monetary policy framework is yet to be decided, but is likely to involve either money or inflation targeting. Stochastic simulations compare the outcomes for major macroeconomic and financial variables pre- and post-EMU under both policy rules, as well as under an inflation targeting rule that includes output. Implications for the euro as a reserve currency are examined in the light of the expected returns and covariances among reserve currencies. The role of the exchange rate as an indicator and incentives for policy coordination with other major countries are also discussed. Keywords: WP; currency; dollar; euro; deutsche mark; EU country; foreign exchange; currency denomination; EMU simulation; EU currency; pound sterling; currency composition; transmission mechanism; dollar holding; yen share; Currencies; Exchange rates; Inflation targeting; Monetary unions; Inflation; Europe; Global (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1997/058 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
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