The Behavior of Bond Yields Across Exchange-Rate Regimes and the Integration of Capital Markets

Abstract

In Europe as elsewhere, the debate over the appropriate exchange-rate regime continues. One of the major sources of contention is the effect of the regime on the economies involved. Did the move to floating exchange rates alter the behavior of important economic and financial variables within countries? Did it alter relationships among countries? If so, to what degree and in what direction?

JEL Classification: F31