Macro-Economic Shocks, the ERM, and Tri-Polarity
- 1 May 1995
- journal article
- Published by JSTOR in The Review of Economics and Statistics
- Vol. 77 (2) , 321
- https://doi.org/10.2307/2109868
Abstract
We use the comparative behavior of real output growth and inflation behavior of members and non-members of the ERM to analyze the importance of ERM membership on macroeconomic performance. An econometric procedure for identifying temporary and permanent shocks to output is proposed and executed. The results confirm that the ERM has acted as a vehicle for macro-policy coordination between members. We also investigate several issues relating to the hypothesis of global economic "tri-polarity" between the United States, Germany and Japan.Keywords
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