مزایای استفاده از معرفی نرخ ارز هدف در اساسنامه بانک مرکزی اروپا

With the help of a Keynesian dynamic macro-economic model in an open economy, this paper studies the possible consequences of introducing an exchange rate target within the statutes of the European Central Bank. It appears that such a target would have only slight implications for the mitigation of demand or external supply shocks. In the case of internal negative supply shocks, this scheme could limit the conflict of goals between the monetary and budgetary authorities and reduce the slowdown in economic activity. Nevertheless, the fact that the central bank tends to limit the fluctuations in its interest rates already has the same implications. On the contrary, in the case of positive shocks on interest rates in the rest of the world, an exchange rate target could have its own advantages. Such a scheme could limit the budgetary deficits and the variations in economic activity triggered by foreign shocks.

Many economic studies have tried to estimate the consequences of the creation of a monetary union on the international volatility of exchange rates, and to compare the potential volatility of the exchange rate of a unique currency with the volatility of ancient national currencies after a monetary unification (e.g. Bartolini and Bodnar, 1996, Benassy et al., 1997, Benassy and Pisani-Ferry, 1998, Creel and Sterdyniak, 1998, Fitoussi, 1999 and Van Oorschot et al., 2000). But the results of these studies are generally divided, as many phenomenons act in opposite directions regarding the volatility of a common currency like the euro, for example. Indeed, Martin (1997) estimates that in the context of the Economic and Monetary Union (EMU), the big countries are less incited to use the exchange rate in a strategic way in order to stabilize the real economy, thus limiting the volatility of the euro. Indeed, the monetary policy of the European Central Bank (ECB) now reacts to an average of the conjuncture conditions of the European countries: its utilization is then more limited than if the monetary policies were differentiated. Nevertheless, a little country must be worried about stabilizing its exchange rate, in order to avoid large inflationary or commercial shocks. But this is not the case of the European monetary zone, whose degree of openness is only slightly above 10% of GDP Artus, 1997, Cohen, 1997 and Benassy et al., 1997. Afterwards, in case of a conflict of goals between the monetary and budgetary authorities for the stabilization of the negative supply shocks, a bad management of the European “policy-mix” could imply an overly restrictive monetary policy and excessive increases in interest rates, that could also increase the instability of the euro. Moreover, Creel and Sterdyniak (1998) mention that the paralysis of the budgetary policies in Europe due to the stability and growth pact could also increase the monetary activism and the volatility of the euro. Finally, whereas the mistaken variations in the dollar in relation to the European currencies could be at the origin of tensions in the EMS framework, this is no longer the case in the EMU. The ECB could then be tempted to neglect the fluctuations in the euros’s exchange rate. Article 109 of the Maastricht Treaty implies a certain institutional haze on the respective responsibilities of the ECB and of the governments of the member states of the EMU for the determination of the European exchange rate policy. But what could be the consequences if the ECB fully neglects fluctuations in the value of the common currency? Institutionally, the main objective of the ECB is to preserve the price stability; the hypothesis that it could target the exchange rate has been studied however rejected by the European Monetary Institute in 1997. Nevertheless, an important depreciation in the European currency, like in 1999 and 2000, increases the risks of an imported inflation and also discourages the capital investment in Europe. However, after March 2002, the euro has greatly appreciated, which is on the contrary harmful to the European exports. Despite these risks traditionally mentioned, the ECB seemed to neglect any exchange rate target at the beginning of its existence. Indeed, the non-sterilized interventions on the exchange markets in order to stabilize the euro directly put into question and are in competition with its internal main objective of price stability. Nevertheless, the ECB knows that the euro’s exchange rate influences the inflationary anticipations (through its impact on the import prices), and that the value of the euro determines the price competitiveness and the growth perspectives of the whole Euro-zone. It also influences the credibility, the efficiency and the stability of the European financial system.1 Beyond these traditional arguments, the second section presents a dynamic Keynesian macroeconomic model able to make clear the risks associated with a negligence of the exchange rate by the ECB that are less often underlined, related to the inefficiency in a non-coordinated formation of the European policy-mix. Afterwards, the third section studies the consequences of an absence of exchange rate target for the global economic policies led by the authorities with more precision. The fourth section then analyzes the implications of these policies on the well-being of the economic agents. Finally, the fifth section concludes.

Should the European Central Bank take the fluctuations in the euro more into account, and should it eventually consider in a more explicit way an exchange rate target, complementing its main goal of preserving the price stability? Our study has shown that targeting the exchange rate could have different advantages according to the nature of the shocks. First, the positive demand shocks or the negative supply shocks in the rest of the world imply more restrictive monetary and budgetary policies in the monetary union; the risk of giving an exchange rate target to the central bank is then to increase the fluctuations in economic activity. Regarding the internal negative supply shocks, and also more moderately regarding the positive shocks anticipated for the following period in the rest of the world, the main advantage of an exchange rate goal is to avoid the formation of inefficient economic policies in the context of conflicting goals between the economic authorities. It limits the danger of the appearance of a harmful outbidding of increases in interest rates and in public expenditures, and it can also diminish the slowdown in economic activity. Nevertheless, limiting the fluctuations in its interest rates is a goal at least implicitly present in the behavior of each central bank, and this goal already implies nearly the same consequences as an exchange rate target regarding the stabilization of the shocks mentioned above. It is therefore only in the case of shocks on interest rates in the rest of the world that altering the weight given by the central bank to the goal of stabilizing the exchange rate of the common currency can really have an additional and consistent advantage. Indeed, after a positive shock on the foreign interest rates, the monetary policy is similarly restrictive in the monetary union and the budgetary policies are complementary. Nevertheless, if the central bank gives a larger weight to the exchange rate goal, this increases the role of the central bank and decreases the one of the governments in the stabilization of these shocks. Introducing such a goal could then have the advantage to reduce the fluctuations in economic activity and the risks of budgetary deficits. In conclusion, the weight that the central bank should give to the exchange rate goal depends on many parameters. First, it depends on the preferences of the economic authorities. Indeed, if the central bank neglects this goal, in the case of negative supply shocks, this is all the more inefficient for the well-being of the economic agents as the preferences of the central bank are distant and differ from those of the governments. But it also depends on the shocks which mainly affect the countries of the monetary union. Beyond the traditional arguments (effect on exports, movements of assets, etc.) for giving an exchange rate target to the ECB, our model shows that sometimes, it would also allow for the creation of a much more efficient policy-mix in Europe.