The exchange rate mechanism's role in the european monetary system

1995 ◽  
Vol 1 (3) ◽  
pp. 212-218
Author(s):  
I. S. Hamwi ◽  
F. Niroomand ◽  
T. Hudson
Keyword(s):  
Exchange Rate ◽  
European Monetary System ◽  
European Monetary ◽  
Monetary System ◽  
The Exchange Rate

scholarly journals Exchange rate and interest rate distribution and volatility under the Portuguese target zone

2010 ◽  
Vol 57 (3) ◽  
pp. 261-282 ◽  
Author(s):  
Duarte Portugal ◽  
Sousa Andrade ◽  
Adelaide Duarte
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Exchange Rate Volatility ◽  
European Monetary System ◽  
European Monetary ◽  
Target Zone ◽  
Rate Distribution ◽  
Economies In Transition ◽  
Portuguese Economy ◽  
The Exchange Rate

The aim of this study is to analyse the exchange rate and interest rate distribution and volatility under the participation of the Portuguese economy in the Exchange Rate Mechanism (ERM) of the European Monetary System (EMS) based on some of the main predictions of the target zone literature. Portugal adopted this exchange rate target zone from April 6 1992 until December 31 1998. During this period, the exchange rate distribution reveals that the majority of the observations lie close to the central parity, thus rejecting one of the key predictions of the Paul Krugman (1991) model. The analysis of the data also shows that exchange rate volatility tended to increase as the exchange rate approached the edges of the band, contrary to the predictions of the basic model. Interest rate differential volatility, on the other hand, seemed to behave in line with theoretical predictions. This suggests an increase in the credibility of monetary policy, allowing us to conclude that the adoption of a target zone has contributed decisively to the creation of the macroeconomic stability conditions necessary for the participation in the European Monetary Union (EMU). The Portuguese integration process should therefore be considered as an example to be followed by other small open economies in transition to the euro area.

Exchange rate expectations and risk premia in the European Monetary System: 1985?1991

1994 ◽  
Vol 5 (4) ◽  
pp. 347-360 ◽  
Author(s):  
Stefano M. F. G. Cavaglia ◽  
Kees G. Koedijk ◽  
Peter J. G. Vlaar
Keyword(s):  
Exchange Rate ◽  
European Monetary System ◽  
Risk Premia ◽  
European Monetary ◽  
Monetary System ◽  
Exchange Rate Expectations

Self-Fulfilling and Fundamentals Based Speculative Attacks: A Theoretical Interpretation of the Euro Area Crisis

2016 ◽  
Vol 16 (3) ◽  
pp. 459-478 ◽  
Author(s):  
Pompeo Della Posta
Keyword(s):  
Exchange Rate ◽  
Euro Area ◽  
European Monetary System ◽  
Point Of View ◽  
Theoretical Interpretation ◽  
Costs And Benefits ◽  
European Monetary ◽  
Economic Fundamentals ◽  
Monetary System ◽  
The Government

The recent euro area crisis shows some similarities with the fixed exchange rate crisis that affected the European Monetary System in 1992–93. I argue that the theoretical framework to be used in order to analyze them should also be similar. As a matter of fact, in both cases, the point of view of the government (that compares costs and benefits of its action) should be considered together with the point of view of speculators, who look at the state of the economic fundamentals in order to decide whether to launch an attack or not. This allows to represent and to interpret, among other things, both the initial “honeymoon” years of EMU and the recent euro area crisis.

Limiting Exchange Rate Flexibility: The European Monetary System.

Economica ◽  
1991 ◽  
Vol 58 (230) ◽  
pp. 261
Author(s):  
George Alogoskoufis ◽  
F. Giavazzi ◽  
A. Giovannini
Keyword(s):  
Exchange Rate ◽  
European Monetary System ◽  
European Monetary ◽  
Exchange Rate Flexibility ◽  
Monetary System
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