Price and monetary convergence in currency unions: the franc and rand zones

Article Abstract:

Membership in a currency union is shown to provide considerable discipline on monetary and price developments. A study of peripheral members of the franc and rand zones, the two main surviving currency unions, shows that core countries have decisive influences on inflation and interest rate trends in these countries. Thus in the long run, consumer price inflation in the French-influenced countries is largely determined in France and uncontrolled interest rates in South African-dependent nations also converge to levels existent in South Africa.

Economic aspects, Rand (South Africa)

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European integration and asymmetry in the EMS

Article Abstract:

A study covering the hypothesis of a German dominance in the European Monetary System (EMS) revealed that such concern is not certifiable. The analysis involved official intervention rates and short rates to describe the official and the market reactions to monetary innovations, respectively. Results showed that the symmetrical functioning of the system will allow the European Union to meet targets and that the EMS will likely contribute to the stability of the global financial markets.

International Affairs, European Community, Eurodollar Rate, Germany, Eurocurrency market

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A pitfall in computing exchange rate density in the EMS band

Article Abstract:

The distance of most European Monetary System (EMS) currencies with the edge of the EMS band during 1987-1992 period was greater compared to pre-1987 period. Such condition can be greatly attributed to an increased intramarginal intervention after the Basle-Nyborg agreement. It was also observed that most EMS currencies did not have a great amount of time to be near the middle of the available fluctuation band.

Exchange Rates, Models, Analysis, Foreign exchange, Monetary policy

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