If you are experiencing problems downloading PDF or HTML fulltext, our helpdesk recommend clearing your browser cache and trying again. If you need help in clearing your cache, please click here . Still need help? Email email@example.com
The issue of credibility and capital mobility in the EMS is re-examined using an alternative methodology, as well as a longer sample period than previous studies. In particular, the dynamic relationship between interest rate differentials and the exchange rate risk premium is emphasized. The relationship between the premium and credibility is then used in order to identify patterns of credibility in ERM countries. Credibility in the case of Italy has declined post-1985, as indicated by the rising exchange rate risk premium. For Denmark, France and Ireland, credibility seems to be increasing up to the currency crisis period and for Belgium and Holland credibility increased early in the period and remained high during the rest of the period.