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Title: |
Changes in the Extent of Financial
Interdependence between the G7 Countries in the 1970s and 1980s |
| Author: |
Holmes, Mark
J.; Pentecost, Eric J. |
| Author
Affiliation: |
Loughborough U |
| Source: |
International Economic Journal, Winter 1992, v. 6, no. 4, pp. 95-105 |
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Publication Date: |
Winter 1992 |
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Abstract: |
This paper uses principal components
analysis to examine the extent to which financial interdependence within
the G7 countries has changed between the 1970s and the 1980s. In
general, evidence is found of both greater capital market integration
and of monetary interdependence. More specifically, the U.S., Japan and
West Germany have all lost some degree of autonomy over monetary policy,
while the U.K. has retained some autonomy by remaining outside the
exchange rate mechanism of the European monetary system. In terms of
capital market integration, five of the G7 countries seem to have become
more interdependent, the exceptions being Japan and the U.K. |
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