TY  - JOUR
AU  - Rose,Andrew K.
AU  - Svensson,Lars E.O.
TI  - European Exchange Rate Credibility Before the Fall
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4495
PY  - 1993
Y2  - October 1993
UR  - http://www.nber.org/papers/w4495
L1  - http://www.nber.org/papers/w4495.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  - Realignment expectations which measure exchange rate credibility are analyzed for European exchange rates, using daily financial data since the inception of the EMS.  It is difficult to find economically meaningful relationships between realignment expectations and macroeconomic variables, although there are signs that lower inflation improves credibility.  Statistically, many movements to realignment expectations are common to ERM participants.  There were few indications of poor ERM credibility before late August 1992; the dimensions of the currency crisis of September 1992 appear to have taken both policy-makers and private agents largely by surprise.
ER  -