Asymmetry in the ERM: A Case Study of French and German Interest Rates Before and After German Unification

Daily French and German interest rate changes since the Basle-Nyborg agreement of September 1987 are examined empirically. In particular, it is asked whether the shock associated with German unification altered the degree of leadership of German monetary policy in the exchange rate mechanism (ERM). The paper finds that Germany's leadership role within the ERM largely disappeared in the year following unification but that the Bundesbank began reasserting its predominance thereafter.

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Year of publication:	1993
Authors:	Gardner, Edward H. ; Perraudin, William R. M.
Published in:	IMF Staff Papers. - Palgrave Macmillan, ISSN 1020-7635. - Vol. 40.1993, 2, p. 427-450
Publisher:	Palgrave Macmillan

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Extent:	application/pdf
Type of publication:	Article
Classification:	E43 - Determination of Interest Rates; Term Structure Interest Rates ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; E58 - Central Banks and Their Policies ; F31 - Foreign Exchange ; F33 - International Monetary Arrangements and Institutions ; F36 - Financial Aspects of Economic Integration
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008915377