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Real Exchange Rate Variability in Monetary Unions

Published online by Cambridge University Press:  17 August 2016

Paul De Grauwe  and
Hilde Heens
Paul De Grauwe
Affiliation:
University of Leuven
Hilde Heens
Affiliation:
University of Leuven
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Summary

In this paper we compare the interregional and international degree of real exchange rate variability of a number of EMS-countries. This allows us to gain insights into the costs of a monetary union. Our major conclusion is that a monetary union among all EMS members would be costly for some of them if it were instituted today. We also find that a monetary union among a «hard-core» of EMS-countries (Benelux, Germany, Denmark) would not involve major costs.

Résumé

Résumé

Dans cet article, nous comparons le degré de variabilité inter régional et international, des taux de change réels de divers pays du SME. Cette éclaire la question des coûts d’une union monétaire. La conclusion principales est que, si une union monétaire était instaurée aujourd’hui parmi tous les membres de SME, elle se révélerait coûteuse pour certains d’entre eux. Nous montrons également qu’une union monétaire au sein d’un « noya dur » de pays (Bénélux, Allemagne, Danemark) n’impliquerait pas de coûts substantiels.

Keywords

423431432423431432
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 59 , Issue 1-2: Monetary Integration in Europe , 1993 , pp. 105 - 117
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1993 

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Footnotes

*

This paper is produced as part of a CEPR research programme on “Financial and Monetary Integration in Europe’, supported by a grant from the European Commission under its SPES Programme (no. E8900105/RES).

References

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