Alberto Giovannini

Monetary Policy Interactions under Managed Exchange Rates

This paper studies monetary policy games in a two-period Mundell-Fleming model, under a regime of managed exchange rates. A regime of managed exchange rates is defined as one where exchange rates are pegged but bilateral parities can be changed from time to time. The paper argues that such a regime is the most appropriate description of the Bretton Woods system and many arrangements currently in existence. We show that Cournot-Nash equilibria under managed rates differ significantly from those under fixed or floating rates. Under managed rates the world-wide efficiency losses from lack of coordination are not equally shared by all countries.

A European Central Bank? : perspectives on monetary unification after ten years of the EMS

List of figures List of tables Preface List of conference participants 1. Does Europe need its own central bank? Marcello de Cecco and Alberto Giovannini 2. Monetary policy, capital controls and seigniorage in an open economy Allan Drazen Discussion Guillermo A. Calvo and Marco Pagano 3. Seigniorage in Europe Vittorio Grilli Discussion Rudiger Dornbusch and Luigi Spaventa Overview of chapters 2 and 3 Michael Bruno and Edmund S. Phelps 4. Factor mobility, uncertainty and exchange rate regimes Giuseppe Bertola Discussion William H. Branson, Fiorella Padoa Schioppa and Alan C. Stockman 5. Management of a common currency Alessandra Casella and Jonathan Feinstein Discussion Torsten Persson and Guido Tabellini 6. The tastes of European central bankers Carlo Carraro Discussion John Flemming and Alberto Giovannini 7. The costs and benefits of a European currency Daniel Cohen Discussion Alberto Alesina and Charles Wyplosz 8. The monetary unification process in nineteenth-century Germany: relevance and lessons for Europe today Carl-Ludwig Holtrerich Discussion Richard Portes 9. The establishment of a central bank: Italy in the nineteenth century Valeria Sannucci Discussion Charles Goodhart and Gianni Toniolo 10. The founding of the Fed and the destabilization of the post-1914 US economy Jeffrey A. Miron Discussion Marcello de Cecco and Barry Eichengreen 11. Panel discussion on the prospects for a European Central Bank Rainer S. Masera, Wolfgang Rieke, Massimo Russo and Niels Thygesen Index.

THE EUROPEAN MONETARY SYSTEM

Publisher Summary This chapter discusses the European Monetary System. The European Monetary System (EMS) is of great interest to both academic economists and policymakers. The chapter also reviews the rules of the EMS exchange rate arrangement. The EMS consists of an agreement among the central banks of the European Community to manage intra-Community exchange rates and to finance exchange market interventions. Thus, the exchange rate mechanism of the EMS is only one aspect of the system. Moreover, while only a subset of the EEC countries participate in the exchange rate mechanism, all of them belong to the EMS. The EMS is reminiscent of Bretton Woods, not only because the exchange rate regime incorporated in the two systems is similar but also because both systems embody provisions and institutions for granting monetary support to member countries.