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European Exchange Rate Credibility Before the Fall
Haas School of Business, University of California, Berkeley.
Stockholm University, Faculty of Social Sciences, Institute for International Economic Studies.
1993 (English)Report (Other academic)
Abstract [en]

Realignment expectations which measure exchange rate credibility are analyzed for European exchange rates, using daily financial data since the inception of the EMS. It is difficult to find economically meaningful relationships between realignment expectations and macroeconomic variables, although there are signs that lower inflation improves credibility. Statistically, many movements to realignment expectations are common to ERM participants. There were few indications of poor ERM credibility before late August 1992; the dimensions of the currency crisis in September 1992 appear to have been taken both policy-makers and private agents largely by surprise.

Place, publisher, year, edition, pages
Stockholm: IIES , 1993. , 39 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 542
Keyword [en]
realignment, expectations, currency crisis, ERM, EMS
National Category
URN: urn:nbn:se:su:diva-41861OAI: diva2:338016
Available from: 2010-08-10 Created: 2010-08-10 Last updated: 2010-08-10Bibliographically approved

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Svensson, Lars E.O.
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