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The Nominal Exchange Rate Implication of VAT Harmonization in EEC

  • Dai, Meixing

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/13860/1/MPRA_paper_13860.pdf
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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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  1. Brander, James A., 1981. "Intra-industry trade in identical commodities," Journal of International Economics, Elsevier, vol. 11(1), pages 1-14, February.
  2. Fender, J. & Yip, C.K., 1992. "Open Economy Macroeconomics Under Imperfect Cmpetition: A Two Country Model," Discussion Papers 92-18, Department of Economics, University of Birmingham.
  3. Dai, Meixing, 1995. "Reexamination of the Purchasing Power Parity (PPP) under Cournot Competition," MPRA Paper 13906, University Library of Munich, Germany, revised Oct 1995.
  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.
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