The Prospect of a Depreciating Dollar and Possible Tension Inside the EMS
The depreciation of the dollar can lead to conflict within the European Monetary System. In order to develop this theme, I assume that the preferences of German policy-makers are more strongly anti-inflationary than those of the French. This means that the depreciation of the dollar will suit the Germans better than the French. Consequently, a dilemma can arise, wherein no possible realignment can resolve the conflict between France and Germany. Only a return to the conditions of the "snake" will do. That is, France may need to accept a situation where it bears exclusive responsibility for defending the jointly determined parity. But it may not be in the interests of the French nor even, possibly, those of the Germans for France to do so.
|Date of creation:||Mar 1986|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:97. 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: ()
If references are entirely missing, you can add them using this form.