Francisco Ledesma Rodríguez, Manuel Navarro Ibáñez, Jorge Pérez Rodríguez, S. Sosvilla‐Rivero
In this paper we present new insights in the literature on the credibility of the Irish pound in the European Monetary System (EMS), adding value to the previous research, which has focused either on the correlation between Irish interest rates and Irish Pound/Pound Sterling exchange rate (therefore examining the credibility in an indirect way) or on the traditional credibility indicators. In contrast, we try to provide some additional evidence making use of a wider set of credibility indicators, including the marginal credibility that has not been examined before for the Irish case. At the same time, we extend the analysis by considering in our sample the more recent events in the EMS history, particularly the broadening of fluctuation bands in 1993. Our results suggest credibility gains (i) after the realignments of the Irish pound on 4 August 1986, on 12 January 1987 and on 1 February 1993; (ii) after the broadening of the fluctuation bands to ? 15% on 2 August 1993; and (iii) around the devaluation of the Spanish peseta and the Portuguese escudo on 6 March 1995. On the other hand, we detect some occasional reductions in credibility, notably before the monetary turmoil registered in September 1992 and after the Italian lira rejoined the Exchange Rate Mechanism on 25 November 1996. Finally, it is interesting to note that our results suggest that the marginal credibility measure seems to be the best credibility indicator to capture the main events of the sample period. Therefore, the use of an econometric technique that allows the parameters to change along time is quite appropriate for the study of credibility in a target zone (i.e., stabilizing interventions by the central banks, speculative movements by private agents, and realignments modify the parameters of the process along the period studied), justifying further the contribution of our paper.
{"title":"On the Credibility of the Irish Pound in the EMS","authors":"Francisco Ledesma Rodríguez, Manuel Navarro Ibáñez, Jorge Pérez Rodríguez, S. Sosvilla‐Rivero","doi":"10.2139/ssrn.275252","DOIUrl":"https://doi.org/10.2139/ssrn.275252","url":null,"abstract":"In this paper we present new insights in the literature on the credibility of the Irish pound in the European Monetary System (EMS), adding value to the previous research, which has focused either on the correlation between Irish interest rates and Irish Pound/Pound Sterling exchange rate (therefore examining the credibility in an indirect way) or on the traditional credibility indicators. In contrast, we try to provide some additional evidence making use of a wider set of credibility indicators, including the marginal credibility that has not been examined before for the Irish case. At the same time, we extend the analysis by considering in our sample the more recent events in the EMS history, particularly the broadening of fluctuation bands in 1993. Our results suggest credibility gains (i) after the realignments of the Irish pound on 4 August 1986, on 12 January 1987 and on 1 February 1993; (ii) after the broadening of the fluctuation bands to ? 15% on 2 August 1993; and (iii) around the devaluation of the Spanish peseta and the Portuguese escudo on 6 March 1995. On the other hand, we detect some occasional reductions in credibility, notably before the monetary turmoil registered in September 1992 and after the Italian lira rejoined the Exchange Rate Mechanism on 25 November 1996. Finally, it is interesting to note that our results suggest that the marginal credibility measure seems to be the best credibility indicator to capture the main events of the sample period. Therefore, the use of an econometric technique that allows the parameters to change along time is quite appropriate for the study of credibility in a target zone (i.e., stabilizing interventions by the central banks, speculative movements by private agents, and realignments modify the parameters of the process along the period studied), justifying further the contribution of our paper.","PeriodicalId":45826,"journal":{"name":"Economic and Social Review","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2000-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68289640","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1998-01-01DOI: 10.1007/978-1-349-26229-8_4
P. McGregor
{"title":"The Great Famine: A Simple General Equilibrium Model","authors":"P. McGregor","doi":"10.1007/978-1-349-26229-8_4","DOIUrl":"https://doi.org/10.1007/978-1-349-26229-8_4","url":null,"abstract":"","PeriodicalId":45826,"journal":{"name":"Economic and Social Review","volume":"43 31","pages":"72-83"},"PeriodicalIF":0.9,"publicationDate":"1998-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50922441","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1993-11-01DOI: 10.5089/9781451954678.001
Leonardo Bartolini
This paper studies market expectations of a devaluation of the Irish pound from 1987 to 1993, and relates them to the evolution of Ireland's competitiveness over the same period. Much of the volatility of expectations of the currency's devaluation can be explained by developments outside Ireland, particularly by past and anticipated movements of sterling. The devaluation of the Irish pound in January 1993 is estimated to have exceeded investors' realignment expectations as well as the loss of Irish competitiveness since the beginning of the ERM crisis. This "excess devaluation" helps to explain subsequent large capital inflows and the pound's smooth transition to the wide ERM band in August 1993.
{"title":"Devaluation and Competitiveness in a Small Open Economy; Ireland 1987-1993","authors":"Leonardo Bartolini","doi":"10.5089/9781451954678.001","DOIUrl":"https://doi.org/10.5089/9781451954678.001","url":null,"abstract":"This paper studies market expectations of a devaluation of the Irish pound from 1987 to 1993, and relates them to the evolution of Ireland's competitiveness over the same period. Much of the volatility of expectations of the currency's devaluation can be explained by developments outside Ireland, particularly by past and anticipated movements of sterling. The devaluation of the Irish pound in January 1993 is estimated to have exceeded investors' realignment expectations as well as the loss of Irish competitiveness since the beginning of the ERM crisis. This \"excess devaluation\" helps to explain subsequent large capital inflows and the pound's smooth transition to the wide ERM band in August 1993.","PeriodicalId":45826,"journal":{"name":"Economic and Social Review","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"1993-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70865887","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Health education and the demand for tobacco in Ireland, 1953-76: a note.","authors":"B M Walsh","doi":"","DOIUrl":"","url":null,"abstract":"","PeriodicalId":45826,"journal":{"name":"Economic and Social Review","volume":"11 2","pages":"147-51"},"PeriodicalIF":0.9,"publicationDate":"1980-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138811850","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Given a sufficient number of instrumental variables significantly correlated with the investigational variables, consistent estimates of the coefficients of the linear relations can be determined (if they exist), without knowledge of the disturbance variances. The estimates are discussed from the viewpoint of probability convergence. In the case of two investigational and one instrumental variable, all three variables distributed on the normal surface, the distribution of the estimate of the coefficient is found exactly for all sample sizes, on certain hypotheses. The distribution function is remarkably simple. The applicability of the theorem to economic time series is discussed by (a) comparing the probability inferences derived from this Model A with those for the simplest stationary time-series model, termed Model B, and (b) by comparing the large-sample variances on several models. It is found that the theory can be used with confidence when the series are not too short and the error variances not too large. The theory is applied to a particular time series, showing that the accuracy of the estimate of the coefficient depends on the correlation between the instrumental variable and the two investigational variables. The theory to which reference is made in Sections II, III, and IV, relating to the two-investigational-variable case, is extended to many variables and tests are given, applicable when samples are not small, for determining the significance of coefficient estimates.
{"title":"Determination of Linear Relations Between Systematic Parts of Variables with Errors of Observation the Variances of Which are Unknown","authors":"R. Geary","doi":"10.2307/1912132","DOIUrl":"https://doi.org/10.2307/1912132","url":null,"abstract":"Given a sufficient number of instrumental variables significantly correlated with the investigational variables, consistent estimates of the coefficients of the linear relations can be determined (if they exist), without knowledge of the disturbance variances. The estimates are discussed from the viewpoint of probability convergence. In the case of two investigational and one instrumental variable, all three variables distributed on the normal surface, the distribution of the estimate of the coefficient is found exactly for all sample sizes, on certain hypotheses. The distribution function is remarkably simple. The applicability of the theorem to economic time series is discussed by (a) comparing the probability inferences derived from this Model A with those for the simplest stationary time-series model, termed Model B, and (b) by comparing the large-sample variances on several models. It is found that the theory can be used with confidence when the series are not too short and the error variances not too large. The theory is applied to a particular time series, showing that the accuracy of the estimate of the coefficient depends on the correlation between the instrumental variable and the two investigational variables. The theory to which reference is made in Sections II, III, and IV, relating to the two-investigational-variable case, is extended to many variables and tests are given, applicable when samples are not small, for determining the significance of coefficient estimates.","PeriodicalId":45826,"journal":{"name":"Economic and Social Review","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"1949-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2307/1912132","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68688645","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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