The purpose of this collection is to shed light on the processes that lead to convergence or divergence in national inflation rates. It examines inflation and wage behavior in the European Monetary System (EMS), their determinants, and their implications for the credibility and sustainability of the system's exchange rate mechanism (ERM). The contributors examine issues of monetary control, stability of national and ERM-wide money-demand functions, and the influence of the monetary policy of Germany - the pivotal country in the EMS. They identify several causes of inflation and persistent inflation differentials in the EMS. As well as explaining how the EMS worked, the book also offers reasons for its breakdown in 1992-3 under the blow of exogenous shocks and growing policy conflict between member countries.
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About the Author:
Paul De Grauwe is at University of Leuven. Stefano Micossi is at DG III, European Commission.
Review:
`Finding a good book, comprehensive and balanced in its covered topics, with clearly presented findings, and well-minded is quite difficult. I sincerely think that Paul De Grauwe, Stefano Micossi, and Giuseppe Tullio deserve our merits for having edited such a book ... The three editors have
collected excellent papers and provided a real contribution to a better understanding of the recent European debate. A wealth of information and insightful comments on past facts and future developments qualify this book as a great one. This book is valuable for advanced students interested in the
ongoing European economic integration and for policymakers, too, to have a stimulating reading.'
Weltwirtschaftliches Archiv
This book is a collection of careully written essays dealing with the hotly debated topic of the causes of inflation and the importance of the creation of the EMS for the processes that lead to convergence or divergence in inflation rates. This book contains a wealth of interesting
material...it will be of interest to all readers sensitive to the growing debate on the future of European monetary union. - Giuseppe Fontana. Scottish Journal of Political Economy. 1998
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