Year: 1990
Author: Feuerstein, Switgard, Siebke, Jürgen
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 110 (1990), Iss. 3 : pp. 359–379
Abstract
In the paper a model of an exchange rate union with five endogenous variables is presented. For simplicity it is assumed that the two member countries of the exchange rate union react symmetrically to changes of the endogenous variables. According to a method of Aoki (1981), these symmetry assumptions allow the partition of the model into two independent systems of equations. It is shown that the joint exchange rate which is floating against the rest of the world is an important channel of transmission of exogenous shocks between the two countries. In particular it is possible that exogenous disturbances are transmitted negatively to the other member country. Despite the symmetry assumptions, however, the signs of several multipliers of the comparative static analysis remain indeterminate. It follows that, when analyzing multi-country models, one faces a trade-off between comprehensiveness of the model and uniqueness and interpret ability of the results.
Journal Article Details
Publisher Name: Global Science Press
Language: Multiple languages
DOI: https://doi.org/10.3790/schm.110.3.359
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 110 (1990), Iss. 3 : pp. 359–379
Published online: 1990-03
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 21
Author Details
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Währungspolitik in der Übergangsphase zur Europäischen Währungsunion
Bernhard, Herz,
Credit and Capital Markets - Kredit und Kapital, Vol. 25 (1992), Iss. 2 P.185
https://doi.org/10.3790/ccm.25.2.185 [Citations: 1]