The outlook for the Euro : lessons from the DEM

• Autorzy: Richard J. Sweeney
• Języki publikacji: EN

Abstrakty

EN

The Euro started at $1.19 but has fallen as low as $0.82 and risen as high as $1.35. If the Euro behaves like the DEM, the long run value of the Euro is approximately $1.00, and over time, the Euro is likely to rise as high as $1.552 and fall to as low as $0.645. Many have criticized the European Central Bank, often severely, first because the Euro weakened greatly during most of its first three years, starting in January, 1999, and then because it strengthened greatly over the next three years. The Euro has been less volatile so far than the DEM was over the floating period starting in March, 1973; by this standard, the ECB has done as well as the Bundesbank did, and the Bundesbank was acknowledged as by far the best performing European central bank. Based on the record of the DEM, if the new members of the European Union adopt the Euro, they are in for substantial exchange-rate volatility; adopting the Euro may still make a great deal of sense if the new members cannot trust their own central banks to run low-inflation policies. (original abstract)

Słowa kluczowe

EN

Exchange rates; Euro; International banks; World currency

PL

Kurs walutowy; Euro; Banki międzynarodowe; Waluty światowe

• Czasopismo: The Poznań University of Economics Review
• Rocznik: 2005
• Tom: 5
• Numer: nr 1
• Strony: 5--19

Twórcy

autor

Richard J. Sweeney

• Georgetown University, Washington, Stany Zjednoczone

Bibliografia

• Niso A., Jorion Ph. (1990), Purchasing Power Parity in the Long Run, Journal of Finance No. 45, p. 157-174.
• Coakley J., Fuertes A.M. (1997), New Panel Unit Root Tests of PPP, Economic Letters No. 57, p. 17-22.
• Cornell W.B., Kimball Dietrich J. (1978), The Efficiency of Markets for Foreign Exchange, Review of Economics and Statistics No. 60, p. 111-120.
• Dooley M.P., Shafer J. (1976), Analysis of Short-Run Exchange Rate Behavior: March 1973 to September 1975, Washington, DC: Working Paper, Board of Governors of the Federal Reserve System.
• Engel Ch. (2000), Long-run PPP may not hold after all, Journal of International Economics No. 57, p. 243-273.
• Frankel J.A., Rose A.K. (1996), A Panel Project on Purchasing Power Parity: Mean Reversion Within and Between Countries, Journal of International Economics No. 40, p. 209-224.
• Huizinga J. (1987), An Empirical Investigation of the Long Run Behavior of Real Exchange Rates, Carnegie-Rochester Conference Series on Public Policy No. 27, p. 149-210.
• Jorion Ph., Sweeney R.J. (1996), Mean Reversion in Real Exchange Rates: Evidence and Implications for Forecasting, Journal of International Money and Finance No. 15, p. 535-550.
• Logue D.E., Sweeney R.J., Willett T.D. (1978), Speculative Behavior of Foreign Exchange Rates During the Current Float, Journal of Business Research No. 6, p. 159-174.
• MacDonald R. (1996), Panel Unit Root Tests and Real Exchange Rates, Economics Letters No. 50, p. 7-11.
• Mark N.C. (1995), Exchange Rates and Fundamentals: Evidence on Long-Horizon Prediction, American Economic Review No. 85, p. 201-218.
• Meese R.A., Singleton K.J. (1982), On Unit Roots and the Empirical Modeling of Exchange Rates, Journal of Finance No. 37, p. 1029-1035.
• O'Connell P.G.J. (1998), The Overvaluation of Purchasing Power Parity, Journal of International Economics No. 44, p. 1-19.
• Oh K.-Y. (1996), Purchasing Power Parity and Unit Root tests Using Panel Data, Journal of International Money and Finance No. 15, p. 405-418.
• Papell D.H. (1997), Searching for Stationarity: Purchasing Power Parity under the Current Float, Journal of International Economics No. 43, p. 313-332.
• Papell D.H., Theodoridis H. (1998), Increasing Evidence of Purchasing Power Parity over the Current Float, Journal of International Money and Finance No. 17, p. 41-50.
• Siddique A., Sweeney R.J. (1998), Forecasting Real Exchange Rates, Journal of International Money and Finance No. 17, p. 63-70.
• Sarno L., Taylor M.P. (1998), The Behavior of Real Exchange Rates during the Post-Breton Woods Period, Journal of International Economics No. 46, p. 281-312.
• Sweeney R.J. (2005), Mean Reversion in G-10 Nominal Exchange Rates, Washington, D.C.: Georgetown University, McDonough School of Business, Working Paper.
• Wu Y. (1996), Are Real Exchange Rates Nonstationary? Evidence from a Panel-Data Test, Journal of Money, Credit and Banking No. 28, p. 54-63.