The `Walters' Critique of the EMS: A Case of Inconsistent Expectations

Alan Walters has suggested that the European Monetary System will prove dynamically unstable when capital controls are removed. The argument is analysed within a model that includes overlapping contracts. It is found that the short-run effects predicted by Walters only arise when the credibility of the peg differs as between the labour and financial markets: but even if such a difference exists the system is stable in the long run.

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Year of publication:	1990-11
Authors:	Miller, Marcus ; Sutherland, Alan
Institutions:	C.E.P.R. Discussion Papers
Subject:	Credibility \| Disinflation \| European Monetary System \| Stability

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 480
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005504500