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| Author: | Dellas, H. |
| Title: | European monetary union: a new approach |
| Journal: | Journal of International Money and Finance
1997 : AUG, Vol. 16:4, p. 581-594 |
| Index terms: | EUROPEAN MONETARY SYSTEM EXCHANGE RATES EUROPEAN UNION |
| Language: | eng |
| Abstract: | This paper studies the implications of European monetary integration in Europe for real interest rates and for the variability of the transatlatic exchange in Germany and the UK. If the ECB adopts the targeting procedures of the Bundesbank then currency union will lower real interest rates somewhat but significantly decrease exchange rate variability to that in Germany. In the absence of credibility problems and assuming that the UK would have otherwise followed inflation targeting, British participation in the EMU will result in slightly lower UK real interest retes but substantially greater exchange rate volatility against the US. |
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