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EMS: a model for a world monetary order?

  • Exchange Rate Policy
  • Published:
Intereconomics

Abstract

In the debate about the world monetary order there is agreement that greater stability in international currency relationships would be desirable. Could a system of fixed exchange rates between the currencies of the major industrial countries put an end to the present instability? What would be the advantages and weaknesses of such a system modelled on the EMS?

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References

  1. Ronald I. McKinnon: An International Standard for Monetary Stabilization, Washington D.C. 1984; Ronald I. McKinnon: Monetary and Exchange Rate Policies for International Financial Stability: A Proposal, in: The Journal of Economic Perspectives, Vol. 2, No. 1, pp. 83–103.

  2. John Williamson: The Exchange Rate System revised edition, Washington D.C. 1985; John Williamson, Marcus M. Miller: Targets and Indicators: A Blueprint for the International Coordination of Economic Policy, Washington D.C. 1987.

  3. See Andrew Crockett, Morris Goldstein: Strengthening the International Monetary System: Exchange Rates, Surveillance and Objective Indicators, Occasional Paper No. 50, IMF, Washington D.C. 1987.

  4. Edouard Balladur: Ordnung muß sein, in: Wirtschaftswoche, No. 11 (11th March 1988), pp. 90–97; Karl Otto Pöhl: A European central bank and a European currency could be the crowning achievement of the long and difficult process to monetary union in Europe, in: World Link, Geneva, April 1988, reprinted in: Deutsche Bundesbank, Auszüge aus Presseartikeln, No. 23 (7th April 1988), pp. 1–3.

  5. Group of Ten: The Functioning of the International Monetary System, in: IMF Survey, Supplement on the Fund, Vol. 14 (July 1985), paragraph 24.

  6. See also Jacob A. Frenkel, Morris Goldstein: A Guide to Target Zones, IMF Staff Papers, Vol. 33 (1986), No. 4, pp. 633–673, here pp. 659 f.

  7. Se J. A Frenkel, M. Goldstein, op. cit., A Guide to Target Zones, IMF Staff Papers, Vol. 33 (1986), No. 4, pp. 633–673, here p. 659.

  8. See also Wolfgang Filc: Target Zones for the US Dollar?, in: INTERECONOMICS, Vol. 21 (1986), No. 4, pp. 163–169.

  9. Until 1967 the Bundesbank had the right to request the conversion of dollar holdings into gold via the Federal Reserve System. However, in agreement with the Federal German Government, the Bundesbank waived this option from April 1967 onwards. The relevant letters are reproduced in: Deutsche Bundesbank, Auszüge aus Presseartikeln, No. 34, 12th May 1967.

  10. See in this connection Cristina Mastropasqua et al.: Interventions, Sterilization and Monetary Policy in EMS Countries, 1979–87 Perugia 1987, unpublished manuscript.

  11. See for example Olaf Sievert: Is There an Alternative to Floating Exchange Rates?, in: INTERECONOMICS, Vol. 21 (1986), No. 5, pp. 215 ff.

  12. Cf. Michele Fratianni: Europe's Non-Model for Stable Money, in: The Wall Street Journal, European edition, Brusseis, 5th April 1988, reprinted in: Deutsche Bundesbank, Auszüge aus Presseartikeln, No. 23 (7th April 1988), pp. 4 f.

  13. Cf. Otmar Emminger: D-Mark, Dollar, Währungskrisen, Erinnerungen eines ehemaligen Bundesbankpräsidenten, Stuttgart 1986, pp. 368 ff.

  14. See Richard Cooper: Economic Independence and Coordination of Economic Policies, in: R.W. Jones, P.B. Kenen (eds.): Handbook of International Economics II, Amsterdam, p. 30.

  15. See for example Horst Ungerer: Das Europäische Währungssystem und das internationale Wechselkurssystem, in: Hans Seidel (ed.): Geldwertstabilität und Wirtschaftswachstum, Göttingen 1984, p. 112.

  16. Cf. for example Otmar Emminger, op. cit., D-Mark, Dollar, Währungskrisen, Erinnerungen eines ehemaligen Bundesbankpräisidenten, Stuttgart 1986, p. 366.

  17. Leonhard Gleske: Das Weltwährungssystem heute—zwischen Anspruch und Wirklichkeit, in: Deutsche Bundesbank, Auszüge aus Presseartikeln, No. 27 (19th April 1988), pp. 1–6, here p. 5.

  18. See Hans-Eckart Scharrer: Internationalisierung der Geldpolitik. Eine Beurteilung des McKinnon-Ansatzes aus der Sicht der Bundesrepublik Deutschland, in: Wolfgang Filc, Klaus Köhler (eds.): Stabilisierung des Währungssystems-Berlin 1985, p. 248; and Wolfgang Filc, op. cit., Target Zones for the US Dollar?, in: INTERECONOMICS, Vol. 21 (1986), No. 4, p. 168.

  19. See in this connection C. Fred Bergsten: America's Unilateralism, in: C. Fred Bergsten et al.: Conditions for Partnership in International Economic Management, New York 1986.

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Authors and Affiliations

  1. Stuttgart, West Germany

    Peter Bofinger & Christina Gerberding

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  1. Peter Bofinger
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  2. Christina Gerberding
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Bofinger, P., Gerberding, C. EMS: a model for a world monetary order?. Intereconomics 23, 212–219 (1988). https://doi.org/10.1007/BF02925115

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