Discussion Paper Details

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Title: Imported or Home Grown? The 1992-3 EMS Crisis

Author(s): Barry Eichengreen and Alain Naef

Publication Date: October 2020

Keyword(s): Currency Crisis, ERM, European Monetary System and Foreign exchange market intervention

Programme Area(s): Economic History and International Macroeconomics and Finance

Abstract: Using newly assembled data on foreign exchange market intervention, we construct a daily index of exchange market pressure during the 1992-3 crisis in the European Monetary System, allowing us to pinpoint when and where the crisis was most severe. Our analysis focuses on a neglected factor in the crisis: the role of the weak dollar in intra-EMS tensions. We provide new evidence of the contribution of a falling dollar-Deutschmark exchange rate to pressure on EMS currencies

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Bibliographic Reference

Eichengreen, B and Naef, A. 2020. 'Imported or Home Grown? The 1992-3 EMS Crisis'. London, Centre for Economic Policy Research.