German dominance in the European Monetary System: Evidence from money supply growth rates
AbstractThis paper presents further evidence on ostensible German dominance in the European Monetary System (EMS). A dynamic system of equations is built explaining money growth rates as a function of the EMS countries' money growth rates, the world money growth rate, exchange rate objectives, inflation rates, and real income growth rates. A test of German dominance based upon money growth rates is a test of the hypothesis that the EMS has increased the comovements of money demand between countries in the system. It is found that German independence holds, but other central banks can also be important players in the system in that they can conduct independent monetary policies. Monetary policies in the EMS are best characterized as interactive. Therefore, the strict German dominance hypothesis is rejected. It follows that the EMS has not increased significantly the link between money demand functions in the EMS countries in the â€œhierarchicalâ€ structure as claimed by the dominance argument. Copyright Kluwer Academic Publishers 1991
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Springer in its journal Open Economies Review.
Volume (Year): 2 (1991)
Issue (Month): 3 (October)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100323
exchange rates; international monetary arrangements;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Urbain, J. P., 1989. "Model selection criteria and granger causality tests : An empirical note," Economics Letters, Elsevier, vol. 29(4), pages 317-320.
- Fratianni, Michele & von Hagen, Juergen, 1990. "The European Monetary System ten years after," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 32(1), pages 173-241, January.
- Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
- Melvin, Michael, 1985. "Currency Substitution and Western European Monetary Unification," Economica, London School of Economics and Political Science, vol. 52(205), pages 79-91, February.
- Michele Fratianni & Juergen Hagen, 1992. "German dominance in the EMS:The empirical evidence," Open Economies Review, Springer, vol. 3(1), pages 127-128, February.
- Michele Fratianni & Juergen Hagen, 1990. "German dominance in the EMS," Open Economies Review, Springer, vol. 1(1), pages 67-87, February.
- A M Spiru, 2007. "Inflation convergence in the new EU member states," Working Papers 590260, Lancaster University Management School, Economics Department.
- Josef Brada, Ali M. Kutan, 2002.
"Balkan and Mediterranean Candidates for European Union Membership: The Convergence of Their Monetary Policy with That of the European Central Bank,"
Eastern European Economics,
M.E. Sharpe, Inc., vol. 40(4), pages 31-44, July.
- Brada, Josef C. & Kutan, Ali M., 2001. "Balkan and Mediterranean candidates for European Union membership: The convergence of their monetary policy with that of the European Central Bank," ZEI Working Papers B 21-2001, ZEI - Center for European Integration Studies, University of Bonn.
- Josef C. Brada & Ali M. Kutan, 2002. "Balkan and Mediterranean Candidates for European Union Membership: The Convergence of their Monetary Policy with that of the European Central Bank," William Davidson Institute Working Papers Series 456, William Davidson Institute at the University of Michigan.
- Joseph Daniels & David VanHoose, 1998. "Two-Country Models of Monetary and Fiscal Policy: What Have We Learned? What More Can We Learn?," Open Economies Review, Springer, vol. 9(3), pages 265-284, July.
- Brada, Josef C. & Kutan, Ali M., 2001.
"The convergence of monetary policy between candidate countries and the European Union,"
Elsevier, vol. 25(3), pages 215-231, September.
- Brada, Josef C. & Ktan, Ali M., 2001. "The convergence of monetary policy between candidate countries and the European Union," ZEI Working Papers B 07-2001, ZEI - Center for European Integration Studies, University of Bonn.
- John Thornton & Alicia García-Herrero, 1997. "Additional evidence on monetary base and interest rate linkages in the EMS," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 133(2), pages 359-368, 06.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.