TY - JOUR AU - Collins,Susan M. AU - Giavazzi,Francesco TI - Attitudes Towards Inflation and the Viability of Fixed Exchange Rates: Evidence From the EMS JF - National Bureau of Economic Research Working Paper Series VL - No. 4057 PY - 1992 Y2 - April 1992 UR - http://www.nber.org/papers/w4057 L1 - http://www.nber.org/papers/w4057.pdf N1 - Author contact info: Susan M. Collins Joan and Sanford Weill Dean of Public Policy Gerald R. Ford School of Public Policy Weill Hall, Suite 4300 735 South State Street Ann Arbor, MI 48109-3091 Tel: 734-763-2258 Fax: 734-763-9181 E-Mail: smcol@umich.edu Francesco Giavazzi Universita' Bocconi and IGIER Via Guglielmo Rontgen, 1 Milan 20136 ITALY Tel: 0039-02-5836-3304 Fax: 0039-02-5836-3302 E-Mail: francesco.giavazzi@unibocconi.it M1 - published as Susan M. Collins, Francesco Giavazzi. "Attitudes toward Inflation and the Viability of Fixed Exchange Rates: Evidence from the EMS," in Michael D. Bordo and Barry Eichengreen, editors, "A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform" University of Chicago Press (1993) AB - History provides us with many examples of multiple country fixed exchange rate regimes that have eventually fallen apart. In light of these failures, why has the EMS been so successful in stabilizing exchange rates among members, and in expanding its membership? This paper argues that one key aspect of the explanation lies in a convergence in attitudes toward inflation and unemployment among EMS members since the late 1970s. This paper presents new empirical evidence for this convergence using household survey data for eight European countries during 1974-90. We find evidence that initially high inflation countries -- France and Italy -- have experienced a decrease in tolerance for inflation relative to unemployment. Germany and other low inflation countries, in contrast, appear to have experienced a decrease in tolerance for unemployment. The paper also contains a theoretical section that illustrates why shifts in attitudes of voters within a given country might lead that country to join a fixed exchange rate regime. ER -