Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152588
Authors: 
Fratzscher, Marcel
Year of Publication: 
2002
Series/Report no.: 
ECB Working Paper 154
Abstract: 
The paper analyses the trade-off between exchange rate flexibility and monetary policy autonomy. It tests empirically the 'Possible Duality' hypothesis, i.e. whether countries with more flexible currency regimes are indeed able to exert more monetary policy autonomy than those with less flexible ones, and whether moving towards exchange rate flexibility allows countries to gain monetary independence. The results for a set of open emerging markets and ERM countries show no systematic link between exchange rate flexibility and monetary independence. It is also found that the Fed is still the dominant force in world capital markets, although the importance of EU monetary policy decisions has been increasing and a Euro bloc has formed in Europe.
Subjects: 
error correction model
exchange rate regime
GARCH
international transmission
monetary policy
JEL: 
F41
F31
E50
Document Type: 
Working Paper

Files in This Item:
File
Size
416.36 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.