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Title: Assessing the credibility of a target zone: evidence from the EMS
Authors: Ledesma Rodríguez,Francisco 
Navarro Ibáñez,Manuel 
Pérez Rodríguez, Jorge Vicente 
Sosvilla Rivero,Simón Javier 
UNESCO Clasification: 531008 Acuerdos monetarios internacionales
Keywords: Sistema monetario europeo
Issue Date: 2005
Publisher: 0003-6846
Journal: Applied economics (Print) 
Abstract: This paper provides some new evidence on the credibility of the Exchange Rate Mechanism (ERM) of the European Monetary System (EMS). The study differs from previous research in the literature in three main respects. First, the main contribution is the use of several credibility indicators, some of which have never been applied before to all of the currencies under study. This allows one to strengthen the results obtained in this paper. Second, a longer period than that of previous studies is analysed, covering the complete EMS history. Third, a comparison has been made of the prediction qualities of the different indicators, in order to explore their ability to capture the main ERM events (realignments, changes in the fluctuations bands and speculative pressures). Fourth, the indicators are applied to the experience of the new, modified ERM linking the currencies of non-euro area Member States to the euro, showing the relevance of this approach in the near future with the enlargement of the European Union.
ISSN: 0003-6846
DOI: 10.1080/00036840500293722
Source: Applied Economics[ISSN 0003-6846],v. 37, p. 2265-2287
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