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THE EUROPEAN PERSPECTIVE ON THE COMPOSITION AND VARIABILITY OF THE ECU
Author(s) -
Johnson Robert R.,
Soenen Luc A.
Publication year - 1994
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1994.tb00358.x
Subject(s) - lira , pound (networking) , composition (language) , portuguese , german , irish , currency , economics , economic history , economy , monetary economics , history , art , exchange rate , literature , linguistics , philosophy , archaeology , world wide web , computer science
In 1979 the Ecu was established as a currency basket including the currencies of the nine EC‐member countries at that time. Its composition was modified in 1984 and again in 1989 by increasing the number of currencies in the basket to 10 and 12 respectively. The results of our analysis show that the Ecu has become consistently less variable with each change in its composition, when expressed in terms of the Greek drachma, Italian lira, Portuguese escudo, Spanish peseta, and to a lesser extent the British pound. However, the Ecu has become consistently less stable with respect to the German mark and the Dutch guilder. The results were mixed for the Belgian/Luxembourg franc, French franc, Irish punt and Danish krone.