Who Needs Bands? Exchange Rate Policy Before Emu

20 Pages Posted: 15 Feb 2006

See all articles by Tamim Bayoumi

Tamim Bayoumi

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Date Written: April 1995


Two issues are discussed. The first is which countries might benefit from entry into EMU before the millennium. Germany and her immediate neighbors appear the most likely to gain; however, our knowledge is too uncertain to say whether all, some, or no countries would reap net economic benefits. The second issue is how to avoid exchange rate instability in the transition to EMU. Experience from earlier exchange rate regimes suggests that an early announcement the parities at which different currencies would enter EMU could reduce such instability if governments were willing to accept the required limitations on domestic policies.

JEL Classification: F33, F36

Suggested Citation

Bayoumi, Tamim, Who Needs Bands? Exchange Rate Policy Before Emu (April 1995). IMF Working Paper, Vol. , pp. 1-20, 1995. Available at SSRN: https://ssrn.com/abstract=883192

Tamim Bayoumi (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6333 (Phone)
202-623-4795 (Fax)

Centre for Economic Policy Research (CEPR)

United Kingdom

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