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A study of the credibility of the Spanish peseta

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Author Info
LEDESMA RODRÍGUEZ, F. J. (Universidad de La Laguna)
NAVARRO IBÁÑEZ, MANUEL (Universidad de La Laguna)
PÉREZ RODRÍGUEZ, J.V. (Universidad de Las Palmas de Gran Canaria)
SOSVILLA RIVERO, S. (FEDEA y Universidad Complutense de Madrid)

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Abstract

In this paper we study the credibility of the Spanish peseta since its entry in the European Monetary System (EMS) in June of 1989. To do this we estimate the conditional elasticities and the risk premia of the Spanish peseta and the German Mark. The index thus obtained shows less confidence in the system after the entry of the peseta. The periods which exhibit the lowest levels of credibility are October of 1990, after the entrance of the British pound into the EMS, and between September and November of 1992, with the devaluations of the peseta and the exit of the British pound and the Italian lira from the EMS. There also seems to be less credibility around March of 1995 with the devaluation of the peseta and at the end of March of 1996 after the last general elections in Spain. En este trabajo se estudia la credibilidad de la peseta desde su entrada en el Sistema Monetario Europeo (SME) en junio de 1989. Para llevarlo a cabo se estiman las elasticidades condicionales y las primas de riesgo de la peseta y del marco alemán. El indicador obtenido muestra una menor confianza en el sistema tras la entrada de la peseta. Los periodos que exhiben los niveles de credibilidad más reducidos son los de octubre de 1990, después de la entrada de la libra esterlina en el SME, y entre septiembre y noviembre de 1992, con las devaluaciones de la peseta y las salidas de la lira italiana y la libra esterlina del SME. También parece haber una menor credibilidad alrededor de marzo de 1995, con la última devaluación de la peseta, y al final de marzo de 1996, después de las elecciones generales.

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Publisher Info
Article provided by Estudios de Economía Aplicada in its journal Estudios de Economía Aplicada.

Volume (Year): 11 (1999)
Issue (Month): (Febrero)
Pages: 85-100
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Handle: RePEc:lrk:eeaart:11_1_8

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Postal: Beatriz Rodríguez Prado. Facultad de CC.EE. y EE. Avda. Valle del Esgueva. Valladolid 47011 SPAIN
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Related research
Keywords: Foreign Exchange; International Monetary Arrangements and Institutions; Credibility; GARCH;

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Find related papers by JEL classification:
C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions
F31 - International Economics - - International Finance - - - Foreign Exchange

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  1. Hallerbach, Winfried G.., 2005. "Holding Period Return-Risk Modeling :The Importance of Dividends," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 23, pages 45-65, Abril. [Downloadable!] (restricted)
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