The European Monetary System has remained relatively stable in the eight years of its existence. The following article analyses the factors that have contributed to this stability and assesses the prospects for the system in the years to come.
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One of the many critics, R. Vaubel, started the Ninth Wincott Memorial Lecture in late 1978 “with a discussion of the New Monetary System -before it is abolished again”. Cf. R. Vaubel: Choice in European Monetary Union, Ninth Wincott Memorial Lecture, Institute of Economic Affairs Occasional Papers No. 55, Institute of International Affairs, London 1979, p. 11.
For a detailed account of the circumstances leading to the realignments cf.H. Ungerer etal.: TheEMS: TheExperience, 1979–82, IMF Occasional Paper No. 19, Washington, D. C, 1983, pp. 5–7; H. Ungerer et al.: The European Monetary System: Recent Developments, IMF Occasional Paper No. 48, Washington, D.C., 1986, pp. 11–16; and Bank for International Settlements: Annual Report, various years.
Cf. R. Vaubel: Logische Implikationen und Anreizwirkungen des Europäischen Währungssystems, in: Zeitschrift für Wirtschafts-und Sozialwissenschaften, Vol. 101, 1981, pp. 1–23, especially pp. 19–22.
Ibid.; and J. Salop: The Divergence Indicator: ATechnical Note, in: IMF Staff Papers, Vol. 28, 1981, pp. 682–697.
Cf. H. Ungerer et al.: The European Monetary System: Recent Developments, op. cit., p. 5; and S. Micossi: The Intervention and Financing Mechanisms of the EMS and the Role of the ECU, in: Banca Nazionale del Lavoro Quarterly Review, No. 155, December 1985, pp. 327–345, pp. 331 ff.
Cf. H. Ungerer et al.: The European Monetary System: Recent Developments, op. cit., p. 5.
Cf. K. Rogoff: Can Exchange Rate Predictability be Achieved without Monetary Convergence? Evidence from the EMS, in: European Economic Review, Vol. 28, 1985, pp. 93–115; H. Ungerer et al.: The European Monetary System: Recent Developments, op. cit., pp. 17–21; and P. de Grauwe and G. Verfaille: The European Monetary System: An evaluation, mimeo, January 1986.
For a more detained discussion of the topic cf. A. Steinherr: Convergence and Cooperation of Macroeconomic Policies: Some basic Issues, in: European Economy, No. 20, July 1984, pp. 71–110.
Cf. K. O. Pöhl: Are We Moving towards a More Stable International Monetary Order?, Lecture at the American Institute for Contemporary German Studies, Washington, on 7th April 1987, in: Deutsche Bundesbank: Auszüge aus Presseartikeln, No. 28, 15th April 1987, pp. 1–4, here p. 1.
O. Sievert: Is there an Alternative to Floating Exchange Rates? in: INTERECONOMICS, Vol. 21,1986, pp. 215–223, here p. 222.
Similar results have been obtained by P. de Grauwe and G. Verfaille, op.cit., pp. 29–35; H. Ungerer et al.: The European Monetary System: Recent Developments, op. cit., pp. 22–27; and K. Rogoff, op. cit., pp. 95–96.
Cf. P. Ludlow: The Making of the European Monetary System, London 1982, pp. 71–73.
Cf. F. Gaivazzi and A. Giovannini: The EMS and the Dollar, in: Economic Policy, Vol. 1, 1986, pp. 456–485; H. M. Kaufmann: The Deutsche Mark Between the Dollar and the European Monetary System, in: Kredit und Kapital, Vol. 18, 1985, pp. 29–60; M. Sarcinelli: The EMS and the International Monetary System: Towards Greater Stability, in: Banca Nazionale del Lavoro Quarterly Review, No. 156, March 1986, pp. 57–83; G. D. Baer: Some Reflections on a Coordinated Dollar Policy. The Pivotal Role of Germany in the EMS, in: AuBenwirtschaft, Vol. 37, 1982, pp. 177–196.
Cf. P. Padoan: The European Monetary System: Pyramid or ECU?, in: International Spectator, Vol. 20, 1985, No. 1, pp. 51–61.
For detailed descriptions of the DM’s movements in the EMS band cf. Bank for International Settlements: Annual Report, various years.
Details on capital controls can be found in: International Monetary Fund: Annual Report on Exchange Rate Arrangements and Exchange Restrictions 1986, Washington, D.C, 1986.
On the prospects for liberalisation in Italy cf. C. A. Ciampi: Address to the 29th National Congress of the Italian Forex Club, held at Sorrento, 25th October 1986, mimeo.
Similar observations are presented in K. Rogoff, op. cit., pp. 107–111.
Cf. Commission of the European Communities: Communication to the Council: Programme for Liberalisation of Capital Movements in the Community, Brussels 1986.
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Fels, J. The european monetary system 1979–1987: Why has it worked?. Intereconomics 22, 216–222 (1987). https://doi.org/10.1007/BF02933531
- Exchange Rate
- Monetary Policy
- Central Bank
- Fiscal Policy
- Capital Control