The European Exchange Rate Mechanism as a macroecotiomic destabilizer
作者:
PATRICK MINFORD,
期刊:
International Journal of Systems Science
(Taylor Available online 1994)
卷期:
Volume 25,
issue 5
页码: 909-928
ISSN:0020-7721
年代: 1994
DOI:10.1080/00207729408929007
出版商: Taylor & Francis Group
数据来源: Taylor
摘要:
For over a decade, the ERM survived in defiance of gloomy predictions that its fate would be similar to that of'the Snake' in the 1970s, which disintegrated a few years after the collapse of Bretton Woods. It survived even the abolition of exchange controls in 1990. But finally it broke down in the face of a series of large shocks—a fluctuating dollar, German reunification, and the debate over the Maastricht Treaty. This paper uses stochastic simulation of the Liverpool World Model to examine the weaknesses in the ERM and compares its stochastic performance with that of floating exchange rates. It argues that European monetary policy should return to domestic monetary targeting within floating exchange rates. It finds that cooperation in European monetary policy is delivered with least stochastic disturbance within such a regime.
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