Using a two-country model of monetary union, we derive the expected time and probability for any one country wanting to return to monetary independence when national inflation biases follow geometric Brownian motions.
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Paper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number
00-5.
Find related papers by JEL classification: E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit F3 - International Economics - - International Finance