Financial History Network. Barry Eichengreen and Alain Naef Seminar

“Imported or Home Grown? The 1992-3 EMS Crisis“ by Alain Naef, Economist, Banque de France and Barry Eichengreen, Professor of Economics and Political Science, University of California at Berkeley Chair: Sergio Castellanos Gamboa, Pontificia Universidad Javeriana Alain Naef is a research economist at the Banque de France. He obtained his Ph.D. from Cambridge University followed by a postdoc at University of California at Berkeley. He is mainly interested in financial history and green finance. Using newly assembled data on foreign exchange market intervention, we construct a daily index of exchange market pressure during the 1992-3 crisis in the European Monetary System (EMS). We use this index to pinpoint when and where the crisis was most intense. Our analysis focuses on the role of the weak dollar in intra-EMS tensions. We document the correlation between the falling dollar-Deutschmark exchange rate and pressure on weak EMS currencies.