Exchange Rate Variability Inside and Outside the EMU

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.

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Year of publication:	1998-12-08
Authors:	Bergbom, Lennart
Institutions:	Nationalekonomiska Institutionen, Uppsala Universitet
Subject:	Exchange rate variability \| EMU \| asymmetric shocks

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Extent:	application/pdf
Series:	Working Paper Series.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Working Paper Series Number 1998:26 48 pages
Classification:	F31 - Foreign Exchange ; F33 - International Monetary Arrangements and Institutions ; F36 - Financial Aspects of Economic Integration ; F41 - Open Economy Macroeconomics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005644554