The impact of the exchange rate regime on exports: evidence from the European Monetary System.

Abstract

We employ the econometric techniques of multivariate cointegration and errorcorrection models to investigate the impact of the creation of the European Monetary System (EMS) on the volume of intra-European Union (EU) exports for eight EU countries. We find that for France, Germany and Ireland, the EMS boosted the volume of intra-EU exports. In the rest of the countries, there has not been a significant effect. Another important result is that exchange rate volatility had no statistically significant long-run or short-run effect on the volume of intra-EU exports in the majority of the countries in our study.