DP1640 Exchange Rate Arrangements between the Ins and the Outs

Author(s): Paul De Grauwe
Publication Date: May 1997
Keyword(s): Exchange Rate, Maastricht Treaty, Monetary Integration
JEL(s): F33, F36, F42
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1640

This paper analyses several issues. First, it describes the main features of ERM II and compares them with those of ERM I as it evolved during the 1980s and 1990s. Second, it analyses whether, and under what conditions, ERM II will be more successful than its predecessor in avoiding disruptive speculative crises. To do so, it uses both new theoretical insights about the factors that affect the occurrence of speculative crises and an historical analysis of the turbulence within ERM I.