This paper examines the interdependence and coordination of monetary and exchange rate policies among the G-3 countries over the period 1977 through 1993. The results in the paper suggest that the international monetary transmission mechanism is important and that, among the G-3, U.S. policies...

Finance theory suggests that changes in exchange rates should have little influence on asset prices in a world that has become increasingly with integrated capital markets. Indeed, the existing literature examining the relationship between international stock prices and exchange rates finds...