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Was there Monetary Autonomy in Europe on the eve of EMU? The German Dominance Hypothesis Re-Examined

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Abstract

In this paper we re-examine the German dominance hypothesis, as a way to assess whether the loss of monetary autonomy in Europe associated with EMU had been significant. We use Granger-causality tests between the interest rates of Germany and all the countries participating in the European Monetary System, with the sample period running until December 1998. Our results would support a weak version of the hypothesis, with Germany playing a certain "leadership" or special role in the EMS, although she would not have been strictly the "dominant" player.

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Bibliographic Info

Article provided by Universidad del CEMA in its journal Journal of Applied Economics.

Volume (Year): V (2002)
Issue (Month): (November)
Pages: 185-207

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Handle: RePEc:cem:jaecon:v:5:y:2002:n:2:p:185-207

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Keywords: European monetary union; German dominance hypothesis; Granger-causality;

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  23. repec:cup:etheor:v:10:y:1994:i:1:p:95-115 is not listed on IDEAS
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Cited by:
  1. Sibbertsen, Philipp & Wegener, Christoph & Basse, Tobias, 2013. "Testing for a Break in the Persistence in Yield Spreads of EMU Government Bonds," Hannover Economic Papers (HEP), Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät dp-517, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  2. Oscar Bajo-Rubio & Simón Sosvilla-Rivero & Fernado Fernández-Rodríguez, . "Asymmetry in the EMS: New evidence based on non-linear forecasts," Working Papers, FEDEA 97-24, FEDEA.
  3. Jean-Claude Maswana, 2005. "Assessing the Money, Exchange Rate, Price Links during Hyperinflationary Episodes in the Democratic Republic of the Congo," Economics Bulletin, AccessEcon, vol. 15(19), pages 1-10.
  4. Forssbaeck, Jens & Oxelheim, Lars, 2005. "On the Link between Exchange-Rate Regimes and Monetary-Policy Autonomy: The European Experience," Working Paper Series, Research Institute of Industrial Economics 637, Research Institute of Industrial Economics.
  5. Maswana, Jean-Claude, 2006. "An empirical investigation around the finance-growth puzzle in China with a particular focus on causality and efficiency considerations," MPRA Paper 3946, University Library of Munich, Germany, revised Apr 2006.

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