This paper attempts to provide some answers to a number of related questions. Has the European Monetary System reduced (real or nominal, bilateral or effective) exchange rate volatility? If so, has this been at the expense of increased interest rate volatility? How important have capital...

The covered interest parity (CIP) theorem states that the covered interest differential between two similar assets denominated in different currencies should be zero. This paper utilizes high-quality data recorded by the dealers at the Bank of England to test CIP during periods in which news is...

In this paper we use a recently developed multivariate cointegration technique to analyse the degree of policy convergence of EMS member relative to that of some non-EMS countries. Interestingly, we find convergence for the nominal and real exchange rates and money supplies of the EMS members...

Recent research in financial economics has concentrated on the role of non-economic, or non-fundamentalist, speculators in asset markets. This paper presents some empirical evidence concerning the nature and perceived importance of a major form of non-fundamentalist analysis, chartism, in the...