The prevalent explanation of the Exchange Rate Mechanism (ERM) currency crisis of September, 1992 is that myopic speculation prevailed over the “fundamentals.†Our paper explores the reasons why the Italian lira and the U.K. pound were attacked and, subsequently, forced out of the ERM....

This paper employs worldwide data on output and bilateral trade in order to identify optimum currency areas (OCAs) on a global basis. By retaining only two of the many criteria in the literature on OCAs, computer programming could serve to do the identification. The two chosen criteria relate to...

The changing relationships between the G-7 countries are examined through VAR models for quarterly growth, estimated over sub-periods and using a rolling data window. Trivariate models are employed, each including the US and a European (E15) aggregate. The results show that conditional...

A striking feature of international economic relations is the limited extent of intertemporal trade and risk-sharing among nations. This paper uses data on consumption, income, and production from regions of the United States to address the question of whether the limited participation of...