TY  - JOUR
AU  - Rose,Andrew K.
AU  - Svensson,Lars E.O.
TI  - Expected and Predicted Realignments: The FF/DM Exchange Rate During the EMS
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3685
PY  - 1995
Y2  - October 1995
UR  - http://www.nber.org/papers/w3685
L1  - http://www.nber.org/papers/w3685.pdf
N1  - Author contact info:
Andrew K. Rose
Haas School of Business Administration
University of California, Berkeley
Berkeley, CA 94720-1900
Tel: 510/642-6609
Fax: 510/642-4700
E-Mail: arose@haas.berkeley.edu

Lars E.O. Svensson
Sveriges Riksbank
SE-103 37 Stockholm
SWEDEN
Tel: +46 8 787 0107
Fax: +46 8 21 0531
E-Mail: lars.svensson@iies.su.se
AB  - An empirical model of time-varying realignment risk in an exchange rate target zone is developed. Expected rates of devaluation are estimated as the difference between interest race differentials and estimated expected rates of depreciation within the exchange rate band, using French Franc/Deutsche Mark data during the European Monetary System. The behavior of estimated expected rates of depreciation accord well with the theoretical model of Bertola-Svensson (1990) . We are also able to predict actual realignments with some success.
ER  -