Estimating the degree of interventionist policies in the run-up to EMU

David Sondermann (1) , Mark Trede (1) , Bernd Wilfling (2)

1 Department of Economics
2 Department of Economics

Based on a theoretical monetary exchange-rate model in continuous time this paper establishes a sequential estimation framework which is capable of indicating central bank intervention in the run-up to a currency union. Using daily pre-EMU exchange-rate data for the countries of the current euro zone, we find mixed evidence of active pre-EMU intervention policies (so-called institutional frontloading strategies). Our estimation framework is highly relevant to economic and political agents operating in financial markets of the upcoming EMU accession countries.

Mots clés: Social Sciences & Humanities

David Sondermann, Mark Trede, Bernd Wilfling. Estimating the degree of interventionist policies in the run-up to EMU. Applied Economics, 2009, 43 (2), pp.207. ⟨10.1080/00036840802481884⟩. ⟨hal-00582300⟩