Monetary Policy Under a Quasi-Fixed Exchange Rate Regime, the Case of France between 1987 and 1996

In this paper, I describe the implementation of monetary policy by the Banque de France between 1987 and 1996. This period was characterized by a quasi-fixed exchange rate for France, as the franc was never realigned within the European Monetary System (EMS). I build indicators of the stance of French monetary policy. These show the influence of the EMS constraint on French monetary policy. In particular, since 1987, the shocks of purely domestic French monetary policy (i.e. the variations of the interest rate around the rule of ERM peg target), have only had very little impact on the French economy