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Estimating the degree of interventionist policies in the run-up to EMU

Vereinigte Staaten von Amerika
Publication Date
  • Political Science
  • Economics
  • Politikwissenschaft
  • Wirtschaft
  • Exchange Rates
  • Emu
  • Continuous-Time Modeling
  • Sequential Estimation
  • Institutional Frontloading
  • Europapolitik
  • Wirtschaftspolitik
  • Wirtschaftsstatistik
  • ├ľkonometrie
  • Wirtschaftsinformatik
  • European Politics
  • Economic Policy
  • Economic Statistics
  • Econometrics
  • Business Informatics
  • Economics
  • Political Science


Based on a theoretical monetary exchange-rate model in continuous time this paper establishes a sequential estimation framework which is capable of indicating central bank intervention in the run-up to a currency union. Using daily pre-EMU exchange-rate data for the countries of the current euro zone, we find mixed evidence of active pre-EMU intervention policies (so-called institutional frontloading strategies). Our estimation framework is highly relevant to economic and political agents operating in financial markets of the upcoming EMU accession countries.

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