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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.

Suggested Citation

  • Dai, Meixing, 1995. "The Nominal Exchange Rate Implication of VAT Harmonization in EEC," MPRA Paper 13860, University Library of Munich, Germany, revised Jun 1996.
    • Handle: RePEc:pra:mprapa:13860
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    References listed on IDEAS

    as
    1. Dai, Meixing, 1995. "Reexamination of the Purchasing Power Parity (PPP) under Cournot Competition," MPRA Paper 13906, University Library of Munich, Germany, revised Oct 1995.
    2. Brander, James A., 1981. "Intra-industry trade in identical commodities," Journal of International Economics, Elsevier, vol. 11(1), pages 1-14, February.
    3. 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.
    4. d'Aspremont, Claude & Dos Santos Ferreira, Rodolphe & Gerard-Varet, Louis-Andre, 1989. "Unemployment in an Extended Cournot Oligopoly Model," Oxford Economic Papers, Oxford University Press, vol. 41(3), pages 490-505, July.
    5. Froot, Kenneth A. & Rogoff, Kenneth, 1995. "Perspectives on PPP and long-run real exchange rates," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 32, pages 1647-1688, Elsevier.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    nominal exchange rate parities; value-added-tax reform; monetary union;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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