Advertisement

Monetary Authorities’ Reaction Functions in a Model of Exchange-Rate Determination for the European Monetary System

Chapter
  • 3 Downloads

Abstract

The purpose of this study1 is to provide an econometric analysis of monetary authorities’ reaction functions capable of accounting for that part in the process of exchange-rate determination which is generally left exogenous in the recent literature. While our aim is therefore to improve on the current state of exchange-rate analysis, the occasion for this research and our main empirical interest in it originate from the need to account for the determination of the exchange rates of the major European currencies, particularly those that have operated under the institutional constraints of the European Monetary Agreement in the seventies (the European ‘snake’) and of the European Monetary System since 1979.

Keywords

Exchange Rate Interest Rate Monetary Policy Real Exchange Rate Reaction Function 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Angeloni, I. and G. Galli (1982) ‘Mercato monetario e mercato dei cambi in Italia: note per la costruzione di un modello econometrico’, mimeo; paper presented at the Workshop on Models for Economic Policy, Perugia, February 4–6.Google Scholar
  2. Banca d’Italia (1978) ‘Struttura e aspetti finanziari del commercio estero dell’Italia: un’analisi per imprese’, Bollettino No. 4 (prepared by A. Biagioli and L. Pompili).Google Scholar
  3. Banca d’Italia (1979) ‘Metodologia di calcolo del tasso di cambio effettivo della lira e delle altre principali valute’, Bollettino, October-December (prepared by A. Ulizzi).Google Scholar
  4. Basevi, G. (1979) ‘V Rapporto sull’Economia Italiana’, CEEP, febbraio.Google Scholar
  5. Basevi, G., G. Pecci and A. Steinherr (1980) ‘Exchange Rate Changes and Their Effects on International Trade: Empirical Studies of the Italian Experience’, Review of Economic Conditions in Italy, Banco di Roma, February.Google Scholar
  6. Basevi, G. and M. Calzolari (1982) ‘Multilateral Exchange Rate Determination’, mimeo; paper presented at the N.B.E.R. Conference on Exchange Rate Theory and Practice, Bellagio, January 26–28.Google Scholar
  7. Black, S. W. (1982) ‘The Use of Monetary Policy for Internal and External Balance in Ten Industrial Countries’, in J. Frenkel (ed.), Exchange Rates and International Macroeconomics (University of Chicago Press for the N.B.E.R.).Google Scholar
  8. Cotula, F. and R. S. Masera (1980) ‘A Model of the Interaction between Money, Credit, Balance of Payments, and Exchange Rate over the Short Run’, in M. Sarnat and G. P. Szego (eds), International Finance and Trade (Massachusetts: Ballinger Publishing Co.).Google Scholar
  9. Deutsche Bundesbank (1979) ‘The European Monetary System: Structure and Operation’, Monthly Report, March.Google Scholar
  10. Fratianni, M. (1980) ‘The European Monetary System: A Return to an Adjustable-Peg Arrangement’, in Monetary Institutions and the Policy Process, Carnegie-Rochester Conference Series on Public Policy, vol. 13, Amsterdam, Autumn, pp. 13 9–72.Google Scholar
  11. Hamaui, R. (1982) ‘Interrelazione fra politica monetaria e valutaria in un modello di determinazione del tarso di cambio’, mimeo, paper presented at the meeting of the Società Italiana degli Economisti, Credito bergamasco, Bergamo, March 12.Google Scholar
  12. Masera, R. S. (1980) Il Sistema Monetario Europeo, Bologna, Il MulinoGoogle Scholar
  13. Rossi, S. (1980) ‘Un approccio analitico al terra degli indicatori di divergenza nello SME’, mimeo, Banca d’Italia.Google Scholar
  14. Salop, J. (1981) ‘The Divergence Indicator: A Technical Note’, International Monetary Fund. Staff Papers, December, pp. 682–97.Google Scholar

Copyright information

© Paul De Grauwe and Theo Peeters 1983

Authors and Affiliations

There are no affiliations available

Personalised recommendations