The contribution of the ECU to exchange-rate stability. A comment

Authors

  • M. SARCINELLI

DOI:

https://doi.org/10.13133/2037-3643/10835

Keywords:

ECU, exchange-rate stability, portfolio approach

Abstract

The article is a brief note criticising some essential elements of Jager and De Jong’s The private ECU’s potential impact on Global and European exchange-rate stability (1988). The author provides three points of criticism which undermine that article’s analysis. Firstly, the ECU ought to be considered in all its functions of an international reserve currency and not only as an investment currency. Secondly, the restrictiveness of the assumptions underlying the portfolio approach make the authors’ outcome useless in practice. Thirdly, the outcome of their calculations favours the hypothesis that the ECU creates exchange-rate stability.

 

JEL: F33, F36

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Published

2013-10-17

How to Cite

SARCINELLI, M. (2013). The contribution of the ECU to exchange-rate stability. A comment. PSL Quarterly Review, 41(166). https://doi.org/10.13133/2037-3643/10835

Issue

Vol. 41 No. 166 (1988)

Section

Editorial

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