Evaluating the EMS and Emu Using Stochastic Simulations: Some Issues
40 Pages Posted: 15 Feb 2006
Date Written: March 1993
Evaluations of European monetary integration using model simulations have given conflicting results, and the paper attempts to elucidate the reasons for the differences. Several features stand out: how to model realignments; how monetary policy is set for individual countries or for Europe; and how large are risk premium shocks in exchange markets. We quantify the effects of different assumptions relating to these features using MULTIMOD.
JEL Classification: F31, F47
Suggested Citation: Suggested Citation