Estimating the degree of interventionist policies in the run-up to EMU
Sondermann David, Trede Mark, Wilfling Bernd
Abstract
Based on a theoretical monetary exchange-rate model in continuous time, this article establishes a sequential estimation framework which is capable of indicating central bank intervention in the run-up to a currency union.Using daily pre-European Monetary Union (pre-EMU) exchange-rate data for the countries of the current Euro zone, we find mixed evidence of active pre-EMU intervention policies (so-called institutional frontloading strategies). Our estimation framework is highly relevant to economic and political agents operating in financial markets of the upcoming EMU accession countries.
Publication type
Research article (journal)
Peer reviewed
Yes
Publication status
Published
Year
2011
Journal
Applied Economics
Volume
43
Start page
207
End page
218
Language
English
ISSN
0003-6846
DOI