Type: Working Paper
The exchange rate - a shock-absorber or source of shocks? : a study of four open economies
Working Paper, CEPR Discussion Paper, 2550
ARTIS, Michael J., EHRMANN, Michael, The exchange rate - a shock-absorber or source of shocks? : a study of four open economies, CEPR Discussion Paper, 2550 - https://hdl.handle.net/1814/4360
Retrieved from Cadmus, EUI Research Repository
The paper provides SVAR estimates for four open economies: the UK, Canada, Sweden and Denmark, making explicit a monetary policy reaction function and taking account of exchange rate targeting practices. The object of the analysis is to examine the idea that an independent money and exchange rate should allow for effective shock-absorption. A polar extreme would be that exchange markets breed their own, and destabilizing, shocks. The paper’s findings vary from one economy to another: monetary union appears easy to recommend for Sweden and Denmark, much less so for Canada and the UK.
Cadmus permanent link: https://hdl.handle.net/1814/4360
Series/Number: CEPR Discussion Paper; 2550
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