Fixed exchange rates with escape clauses: The political determinants of the European Monetary System realignments

2015 ◽  
Vol 39 ◽  
pp. 25-40 ◽  
Author(s):  
Cristina Bodea
Keyword(s):  
Exchange Rates ◽  
European Monetary System ◽  
The Political ◽  
European Monetary ◽  
Monetary System ◽  
Political Determinants ◽  
Fixed Exchange Rates ◽  
Escape Clauses

Has the EMS changed wage and price behaviour in Europe?

1990 ◽  
Vol 134 ◽  
pp. 64-72 ◽  
Author(s):  
Ray Barrell
Keyword(s):  
Exchange Rates ◽  
European Monetary System ◽  
Macroeconomic Performance ◽  
European Monetary ◽  
Monetary System ◽  
Monetary Authorities ◽  
High Inflation ◽  
Improved Performance ◽  
German Monetary Policy ◽  
Rate Mechanism

Macroeconomic performance in Europe was generally agreed to have been poor in the 1970s, with high inflation and low growth. The 1980s saw a significant improvement, with inflation being reduced to under 5 per cent by the end of the decade, and growth reaching some sort of peak in 1989. There were many factors contributing to this improved performance, and the Exchange Rate Mechanism (ERM) of the European Monetary System (EMS) has been given much of the credit. The ERM was supposed to have given the monetary authorities in France and Italy increased anti-inflationary credibility. Their decision to link their exchange rates to the D-Mark involved a commitment to follow German monetary policy and hence involved taking on German anti-inflationary credibility.

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