International policy coordination under alternative exchange rate regimes: The case of the European monetary system.

摘要

This dissertation is a collection of essays that investigate the issue of the international policy coordination of macroeconomic policies under alternative exchange rate regimes and focus the analysis on the case of the European Monetary System (EMS). Chapter 1 compares fixed and flexible exchange rate regimes by considering explicitly the strategic policy interactions between countries under alternative exchange rate regimes. Various fixed and flexible exchange rate regimes are studied and compared under a number of economic disturbances. Chapter 2 presents a four-country Mundell Fleming macro model to discuss the transmission of monetary and fiscal policy under a number of alternative exchange rate regimes. Unlike the analysis in Chapter 1, here the strategic policy interactions between policy makers in different countries are not considered and the focus is on the international transmission of different policy disturbances. In Chapter 3 a European bloc of the MSG simulation model of the world economy is developed to compare the transmission of monetary and fiscal policies among the EMS countries under alternative assumptions about the functioning of the EMS. The second part of the Chapter considers the effects of limited capital mobility in some EMS countries. The insufficiency of formal exchange rate intervention rule to define the symmetric and/or asymmetric nature of a fixed exchange rate regime in the presence of independent sterilization policies is discussed and stressed in the Chapter. Chapter 4 tests the hypothesis that the EMS functions as an asymmetric fixed rate regime characterized by German leadership by considering four types of evidence. First, sterilization functions for the EMS central banks are estimated to obtain estimates of the sterilization coefficient for different countries. Second, offset coefficients of domestic monetary policy are estimated for the seven EMS countries to test the degree of monetary autonomy of different central banks under a fixed rate regime like the EMS. Third, "causality" tests on interest rates are run to test the directionality of the comovements of these variables in the EMS. Finally, the empirical evidence on the exchange rate intervention rules and practices in the EMS is analyzed to detect asymmetries in the adjustment mechanisms of the EMS.