From Hard Currency Policy to Monetary Union

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From Hard Currency Policy to Monetary Union

Author Info

Heinz Handler (Austrian Institute of Economic Research WIFO)

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Heinz Handler

Abstract

The paper elaborates on two successive monetary policy regimes in Austria: First, the economic and political background of the hard currency policy of the 1980s and 1990s, linking the schilling to the D- mark, is analysed. Second, the changeover in 1999 to EMU and its implications for Austria's economic policy strategy are evaluated. With regard to the critique that European monetary policy has neglected real sector developments and potential threats of deflation, it is maintained that the ECB had no other choice given the credibility gap at the start of EMU and the economic circumstances of the time, including the marked swings in the dollar value of the euro. There is, however, lack of transparency with regard to the monetary strategy which the ECB declines to be inflation targeting.

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Paper provided by EconWPA in its series Macroeconomics with number 0408008.

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Length: 22 pages
Date of creation: 11 Aug 2004
Date of revision:
Handle: RePEc:wpa:wuwpma:0408008

Note: Type of Document - doc; pages: 22
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Paper
- Heinz Handler, 2003. "From Hard Currency Policy to Monetary Union," WIFO Working Papers 210, WIFO. [Downloadable!]

Find related papers by JEL classification:
E - Macroeconomics and Monetary Economics

This paper has been announced in the following NEP Reports:

NEP-ALL-2004-08-23 (All new papers)
NEP-CBA-2004-08-23 (Central Banking)
NEP-HIS-2004-08-23 (Business, Economic & Financial History)
NEP-IFN-2004-08-23 (International Finance)
NEP-MAC-2004-08-23 (Macroeconomics)
NEP-MON-2004-08-23 (Monetary Economics)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Paul De Grauwe, 2002. "Challenges for Monetary Policy in Euroland," Journal of Common Market Studies, Blackwell Publishing, vol. 40(4), pages 693-718, November. [Downloadable!] (restricted)
Rogoff, Kenneth, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, MIT Press, vol. 100(4), pages 1169-89, November. [Downloadable!] (restricted)
Karanassou, Marika & Sala, Hector & Snower, Dennis J., 2003. "The European Phillips Curve: Does the NAIRU Exist?," IZA Discussion Papers 876, Institute for the Study of Labor (IZA). [Downloadable!]
Other versions:
- Karanassou, Marika & Sala, Hector & Snower, Dennis J., 2003. "The European Phillips Curve: Does the NAIRU Exist?," CEPR Discussion Papers 4102, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Jens R. Clausen & Juergen B. Donges, 2001. "European Monetary Policy: The Ongoing Debate on Conceptual Issues," The World Economy, Blackwell Publishing, vol. 24(10), pages 1309-1326, November. [Downloadable!] (restricted)
Ben S. Bernanke & Frederic S. Mishkin, 1997. "Inflation Targeting: A New Framework for Monetary Policy?," NBER Working Papers 5893, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Bernanke, Ben S & Mishkin, Frederic S, 1997. "Inflation Targeting: A New Framework for Monetary Policy?," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 97-116, Spring. [Downloadable!] (restricted)
Georg Winckler & Erwin Amann, 1986. "Exchange rate policy in the presence of a strong trade union," Journal of Economics, Springer, vol. 5(1), pages 259-280, December. [Downloadable!] (restricted)
Lars E.O. Svensson, 1999. "How should monetary policy be conducted in an era of price stability?," Proceedings, Federal Reserve Bank of Kansas City, pages 195-259. [Downloadable!]
Other versions:
- Lars E.O. Svensson, 2000. "How Should Monetary Policy be Conducted in an Era of Price Stability?," NBER Working Papers 7516, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
- Svensson, Lars, 1999. "How Should Monetary Policy Be Conducted in an Era of Price Stability," Seminar Papers 680, Stockholm University, Institute for International Economic Studies. [Downloadable!]
- Svensson, Lars E O, 1999. "How Should Monetary Policy Be Conducted In An Era Of Price Stability?," CEPR Discussion Papers 2342, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Chris Faulkner-MacDonagh & Taimur Baig & JÃ¶rg Decressin & Tarhan Feyzioglu & Manmohan S. Kumar, 2003. "Deflation: Determinants, Risks, and Policy Options," IMF Occasional Papers 221, International Monetary Fund.
Allan H. Meltzer, 1999. "Commentary : monetary policy at zero inflation," Proceedings, Federal Reserve Bank of Kansas City, pages 261-276. [Downloadable!]
Hochreiter, Eduard & Winckler, Georg, 1995. "The advantages of tying Austria's hands: The success of the hard currency strategy," European Journal of Political Economy, Elsevier, vol. 11(1), pages 83-111, March. [Downloadable!] (restricted)
Other versions:
- Eduard HOCHREITER & Georg WINCKLER, 1993. "The Advantages of Tying Austria's Hands: The Success of the Hard Currency Strategy," Vienna Economics Papers vie9307, University of Vienna, Department of Economics.
Mervyn King, 1994. "Monetary policy in the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 15(3), pages 109-28, August. [Downloadable!]
Mervyn King, 1999. "Challenges for monetary policy : new and old," Proceedings, Federal Reserve Bank of Kansas City, pages 11-57. [Downloadable!]
Stefan Gerlach & Lars E.O. Svensson, 2000. "Money and Inflation in the Euro Area: A Case for Monetary Indicators?," NBER Working Papers 8025, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Gerlach, Stefan & Svensson, Lars E O, 2002. "Money and Inflation in the Euro-Area: A Case for Monetary Indicators?," CEPR Discussion Papers 3392, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Lars E.O. Svensson & Stefan Gerlach, 2001. "Money and inflation in the Euro Area: A case for monetary indicators?," BIS Working Papers 98, Bank for International Settlements. [Downloadable!]
- Gerlach, Stefan & Svensson, Lars E. O., 2003. "Money and inflation in the euro area: A case for monetary indicators?," Journal of Monetary Economics, Elsevier, vol. 50(8), pages 1649-1672, November. [Downloadable!] (restricted)

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Ernest Gnan & Claudia Kwapil & Maria Terese Valderrama, 2005. "EU and EMU Entry: A Monetary Policy Regime Change for Austria?," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 53-68, August. [Downloadable!]

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