The Credibility of Nordic Exchange Rate Bands: 1987-91

24 Pages Posted: 15 Feb 2006  

Sami Geadah

International Monetary Fund (IMF)

Tapio Saavalainen

International Monetary Fund (IMF)

Date Written: January 1992

Abstract

The credibility of the exchange rate bands in the Nordic countries during 1987-91 is examined with two tests. The results suggest that the credibility of Finland`s exchange rate band within a twelve-month horizon could not be rejected except in the fall of 1991; however, the band lacked credibility within a five-year horizon throughout the period. Denmark`s and Norway`s bands lacked both short- and long-term credibility at the beginning of the period, but credibility could not be rejected from 1989 for Norway and as of 1990 for Denmark. The credibility of Sweden`s band within a one-year horizon could not be rejected up to fall 1989, but thereafter its credibility deteriorated sharply.

JEL Classification: F31, F33

Suggested Citation

Geadah, Sami and Saavalainen, Tapio, The Credibility of Nordic Exchange Rate Bands: 1987-91 (January 1992). IMF Working Paper, Vol. , pp. 1-24, 1992. Available at SSRN: https://ssrn.com/abstract=884523

Sami Geadah (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Tapio Saavalainen

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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