The Nominal Exchange Rate Implication of VAT Harmonization in EEC

Meixing Dai ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines, in a one-good two-country Cournot competition model, the implication of European VAT reform on the nominal exchange rate parities which will be pegged in the third stage of monetary union. As result of the reform, the deutchmark needs to be reevaluated so as to prevent generating systematic external disequilibrium of some other European countries, which is inconsistent with pegging nominal exchange parities of European currencies.

Keywords: nominal exchange rate parities; value-added-tax reform; monetary union (search for similar items in EconPapers)
JEL-codes: F31 F41 (search for similar items in EconPapers)
Date: 1995-09, Revised 1996-06
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:13860

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