Monetary Divergences and Exchange-rate Changes in the European Community: the 1970s

This paper gives answers, inter alia, to the following questions: 1.In what ways have inflation rates and monetary policies in the EC member countries diverged or converged in the 1970s?2.To what extent can the difference in inflation rates be explained by differences in monetary policies?3.To what extent can the exchange-rate changes between the EC currencies be explained by the differences in inflation rates and/or monetary policies and by real exchange-rate trends?4.To what extent have nominal exchange-rate changes been associated with real exchange-rate changes?