From 1970 until the late 1990s, the general price level in Spain consistently rose at a much faster rate than in West Germany. Given this sustained difference in inflation, what was the most probable long-term trend for the value of the Spanish peseta relative to the West German Deutsche Mark during this period?

Analyzing Divergent Inflationary Experiences

Based on the macroeconomic trends observed between 1970 and 1999, it can be concluded that the central bank of Spain consistently prioritized maintaining a stable, fixed exchange rate against the West German Deutsche Mark over controlling domestic price levels.

Evaluating Macroeconomic Policy in 1980s Spain