Inflation and Wage Behaviour in Europe Unknown - 1997

Descripción de contraportada

The Maastricht Treaty makes the convergence of inflation rates one of the preconditions of European Monetary Union (EMU). The purpose of this study is to shed light on the mechanism underlying the processes that lead to convergence or divergence in national inflation rates. It examines inflation and wage behaviour in the European Monetary System (EMS), their determinants, and their implications for the credibility and sustainability of the system's exchange rate mechanism (ERM). Although the focus is on the EMS period, eleven of the twelve studies also review the background of the 1970s. The contributors examine issues of monetary control, stability of national and ERM-wide money-demand functions, the monetary policy of Germany - the pivotal country in the EMS - and its influence on the stability of the system after the fall of the Berlin Wall. As well as explaining how the EMS worked, the book also offers reasons for its breakdown in 1992-3 under the blow of exogenous shocks and growing policy conflict between member countries.