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On the Question of Speculation in Favour of or against the Euro before its Start

  • Lutz Beinsen
Chapter

Abstract

The transition of the European Currency System to a common currency offers an opportunity for the study of speculation in foreign exchanges. There are many reasons for speculative activities in the transition to the Euro. Speculation, as a matter of motives, can only indirectly be observed, that is to say by the statistical evaluation of the behaviour of exchange markets. Five examples are tested which are based on the proposition that the presence of speculation is eventually revealed in certain residuals. Another approach is the comparison of the variances of exchange rate estimates which does not lead to clear results. Finally, the evaluation of random walk estimations reveals a trend of increasing efficiency of certain foreign exchange markets.

Keywords

Exchange Rate European Central Bank Purchasing Power Parity Money Demand Forward Rate 
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.

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Copyright information

© Springer-Verlag Berlin Heidelberg 1999

Authors and Affiliations

  • Lutz Beinsen
    • 1
  1. 1.University of GrazAustria

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