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The Nominal Exchange Rate Implication of VAT Harmonization in EEC

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  • Dai, Meixing

Abstract

This paper examines, in a one-good two-country Cournot competition model, the implication of European VAT reform on the nominal exchange rate parities which will be pegged in the third stage of monetary union. As result of the reform, the deutchmark needs to be reevaluated so as to prevent generating systematic external disequilibrium of some other European countries, which is inconsistent with pegging nominal exchange parities of European currencies.

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File URL: http://mpra.ub.uni-muenchen.de/13860/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13860.

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Date of creation: Sep 1995
Date of revision: Jun 1996
Handle: RePEc:pra:mprapa:13860

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Keywords: nominal exchange rate parities; value-added-tax reform; monetary union;

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  1. Fender, John & Yip, Chong K., 1994. "Open economy macroeconomics under imperfect competition A two-country model," Journal of International Economics, Elsevier, vol. 37(1-2), pages 49-63, August.
  2. James Brander, 1980. "Intra-Industry Trade in Identical Commodities," Working Papers 380, Queen's University, Department of Economics.
  3. d'ASPREMONT, Claude & DOS SANTOS FERREIRA, Rodolphe & GERARD-VARET, Louis-André, . "Unemployment in an extended Cournot oligopoly model," CORE Discussion Papers RP -843, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Dai, Meixing, 1995. "Reexamination of the Purchasing Power Parity (PPP) under Cournot Competition," MPRA Paper 13906, University Library of Munich, Germany, revised Oct 1995.
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