The Dollar-Mark axis
AbstractOver the last two decades, most European currencies have tended to weaken against the mark as the latter strengthened against the dollar. Moreover, the strength of the response of European cross-rates has tended to remain in the same order over time. I first set out the stylised facts of this phenomenon, referred to as the dollar-mark axis, and then try to identify its determinants. In addition to exchange rate policy, I examine the correlation of cyclical fluctuations and trade links (two factors suggested by the theory of optimum currency areas) and the bias of international investors in the currency composition of their portfolios.
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Bibliographic InfoArticle provided by Springer in its journal Weltwirtschaftliches Archiv.
Volume (Year): 137 (2001)
Issue (Month): 1 (March)
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Other versions of this item:
- F3 - International Economics - - International Finance
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
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