The Forex Regime and EMU Expansion
2002-02-06
Research Paper
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This paper provides empirical evidence that, irrespective of the foreign exchange rate regime, countries with high monetary volatility have lower relative output growth rates. It is argued that due to the forward looking nature of the foreign exchange market, exchange rate stability hinges on the stability of the institutional structure within which monetary and fiscal policies are formulated. Subsequently, the likely endogenous response in the accession countries upon entry into EU and EMU is examined. This provides arguments for a rapid transition phase, possibly complemented by a one sided euroisation as a commitment device
Keywords
Classifications using
Journal of Economic Literature (JEL) Classification System
- F33 : International Monetary Arrangements and Institutions
- E52 : Monetary Policy (Targets, Instruments, and Effects)
- F31 : Foreign Exchange
Automatically Extracted Terms
- country
- forex
- regime
- exchange
- growth
- policy
- exchange rate
- interest
- model
- effect
- entry
- regression
- currency
- panel
- result
- estimate
- inflation
- forex regime
- table
- money
