DP15340 Imported or Home Grown? The 1992-3 EMS Crisis
Author(s): | Barry Eichengreen, Alain Naef |
Publication Date: | October 2020 |
Date Revised: | November 2021 |
Keyword(s): | Currency Crisis, ERM, European Monetary System, Foreign exchange market intervention |
JEL(s): | E5, F31, N14, N24 |
Programme Areas: | Economic History, International Macroeconomics and Finance |
Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=15340 |
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