Fear of floating and the external effects of currency unions
Plümper, Thomas and Troeger, Vera E.. (2008) Fear of floating and the external effects of currency unions. American Journal of Political Science, Vol.52 (No.3). pp. 656-676. ISSN 0092-5853Full text not available from this repository.
Official URL: http://dx.doi.org/10.1111/j.1540-5907.2008.00335.x
The introduction of the Euro has considerably affected the de facto monetary policy autonomy—defined as independence from monetary policy in the key currency areas—in countries outside the European Currency Union (ECU). Using a standard open economy framework, we argue that de facto monetary policy autonomy has significantly declined for countries that dominantly trade with the ECU and slightly increased for countries that dominantly trade with the Dollar zone. The predictions of our model find support in the data. We estimate the influence of the Bundesbank's/ECB's and the Fed's monetary policies on various country groups. The de facto monetary policy autonomy of both non-Euro EU members and EFTA countries declined with the introduction of the Euro. This effect was slightly stronger for the EU member countries than for EFTA countries as our theory predicts. At the same time, the de facto monetary policy autonomy of Australia and New Zealand vis-à-vis the US Dollar has (moderately) increased.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HJ Public Finance
J Political Science > JZ International relations
|Divisions:||Faculty of Social Sciences > Economics
Faculty of Social Sciences > Politics and International Studies
|Journal or Publication Title:||American Journal of Political Science|
|Publisher:||Wiley-Blackwell Publishing Ltd.|
|Page Range:||pp. 656-676|
|Access rights to Published version:||Restricted or Subscription Access|
|Version or Related Resource:||Previous versions of this article were presented at the London School of Economics, the University of Essex, Trinity College Dublin, the European University Institute Florence, the Ludwig-Maximillians-University of Munich, the Science Centre Berlin, the University of Freiburg, the University of Augsburg, the University of Hamburg, the Max-Planck-Institute in Cologne, and the 62nd annual meeting of the Midwest Political Science Association, Chicago, April 2004.|
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