The Volatility of the Euro/Dollar Exchange Rate: Empirical Evidence and Policy Implications
examines the volatility of the U$/Euro exchange rate during the period 1999-2005. According to our estimates, the degree of volatility persistence, although statistically significant, is rather low; moreover, there is no evidence of an asymmetric response of predictable volatility to past innovations. Since this evidence excludes a relevant component of ‘nonfundamental’ exchange rate volatility, the main policy implication is that the ECB ‘benign neglect’ approach towards the Euro has been entirely appropriate. This conclusion is in line with the current consensus view emerging from the literature on inflation targeting and monetary policy rules in open economies.
Volume (Year): 61 (2008)
Issue (Month): 2-3 ()
|Contact details of provider:|| Postal: Via Garibaldi 4, 16124 Genova, Italy|
Phone: +39 010 27041
Fax: +39 010 2704222
Web page: http://www.iei1946.it/it/index.php
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ris:ecoint:0038. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Angela Procopio)
If references are entirely missing, you can add them using this form.