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On the small discrepancies between the official and the free rate in the BLEU's dual exchange rate system

Published online by Cambridge University Press:  17 August 2016

F. Boll
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Extract

Up till about 1969 little consideration was given to the BLEU's two-tier system. This situation has meanwhile changed. Since 1971, when disruptive short-term capital movements repeatedly upset the foreign exchange markets, domestic and foreign economists, both official and nonofficial ones, increasingly started investigating two-tier systems in general, and the implications of the BLEU arrangements in particular, as the ones with the longest lifetime.

While lots of good work has already been performed on the latter issue, it could nonetheless be shown that in much of it there has not been sufficiently invested in scrutinizing the official regulations themselves - with main reliance on secondary sources instead - before rationalizing their economic implications and/or building econometric models. This most often resulted in the neglect of some of the system's characteristics, which crucially add to our global understanding of the behaviour of the free exchange rate

Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 41 , Issue 4 , December 1975 , pp. 313 - 340
Copyright
Université catholique de Louvain, Institut de recherches économiques et sociales 1975 

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Footnotes

*

Hoger Instituut voor de Arbeid, Katholieke Universiteit Leuven. Work on this paper started in 1972. It is based on my D. Phil. thesis to be submitted at the University of Oxford in 1976. I am indebted to many persons and institutions: to my supervisor W.M. Corden for guidance and encouragement ; to J.-P. Abraham. Sir A. Cairncross and T. Peeters for discussing a still very sketchy draft on this material in 1973; to P. De Grauwe for some comments on the final draft ; to various, present and former, staff members of the National Bank of Belgium, of the Belgo-Luxembourg Exchange Institute, and of three Belgian commerciabl banks, and, to a broker and B. Jadoul for pieces of information ; to the Centrum voor Economische Studiën of the K.U. Leuven and P. Zonderman for computer facilities in plotting graphs : and last but not least to the Belgian Ministerie van Nationale Opvoeding en Nederlandse Cultuur, the British Council, and the Florey European Studentships Fund of the Queen’s College at Oxford for financial help. Nonetheless. none of these persons or organisations bear responsibility for the facts and opinions recorded hereunder

References

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