Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/22129
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dc.contributor.authorFahrholz, Christianen_US
dc.date.accessioned2009-01-29T14:52:04Z-
dc.date.available2009-01-29T14:52:04Z-
dc.date.issued2003en_US
dc.identifier.urihttp://hdl.handle.net/10419/22129-
dc.description.abstractExchange-rate policies of Central Eastern European Countries (CEEC) have oftenbeen a subject matter. Yet, some new insights in terms of political economyconsiderations upon exchange-rate policy are provided. It is pointed out that it ismore appropriate to analyse exchange-rate policy in course of Exchange RateMechanism II (ERM II) with regard to a changing incentive structure. In doing so,considerable moral hazard problems become apparent.ERM II shall provide for an adequate level of convergence between prospective andcurrent members of European Monetary Union (EMU). However, this institutionalarrangement and, particularly, its impact on the incentives for exchange-rate policymaking might enable CEEC to load considerable costs of convergence onto currentmembers. Accordingly, the phase of ERM II is considered to be a bargaining on thedistribution of costs of convergence between prospective and current members ofEMU. In return, accession countries would offer to maintain public support forEuropean integration. The CEEC? leverage in this bargaining rests on brinkmanship,i.e. putting exchange-rate regimes at risk, thus possibly undermining the accordingpublic support.This paper delineates the basic assumptions and conditions for successfulbrinkmanship, points out the specific transmission mechanisms, and characterisesthis kind of exchange-rate policy as ?threaten-thy-neighbour?. Overall analysis resultsin a cautious outlook on probable effects of such strategic exchange-rate policies onEuropean institutional and economic matters.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseries|aEzoneplus working paper |x14en_US
dc.subject.jelE0en_US
dc.subject.jelF0en_US
dc.subject.ddc330en_US
dc.subject.keywordbrinkmanshipen_US
dc.subject.keywordexchange-rate policyen_US
dc.subject.stwWechselkurspolitiken_US
dc.subject.stwEuropäischer Währungsverbunden_US
dc.subject.stwWechselkursrisikoen_US
dc.subject.stwPublic Choiceen_US
dc.subject.stwMoral Hazarden_US
dc.subject.stwEU-Erweiterungen_US
dc.subject.stwEuropäische Wirtschafts- und Währungsunionen_US
dc.subject.stwOsteuropaen_US
dc.subject.stwEU-Staatenen_US
dc.titleStrategic Exchange-Rate Policy of Accession Countries in ERM IIen_US
dc.typeWorking Paperen_US
dc.identifier.ppn393743233en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-

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