Do We Really Know That Flexible Exchange Rates Facilitate Current Account Adjustment? Some New Empirical Evidence for CEE Countries
AbstractThis paper examines the relationship between the exchange rate regime and the pace of current account adjustment. The panel data set we refer to includes 11 catching-up countries from Central and Eastern Europe between 1994 and 2007. The exchange rate regime is measured by a continuous z-score measure of exchange rate volatility proposed by Gosh, Gulde, and Wolf (2003). Based on a basic autoregression estimation, the results indicate that a more flexible exchange rate regime significantly enhances the rate of current account adjustment.
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Bibliographic InfoArticle provided by Duncker & Humblot, Berlin in its journal Applied Economics Quarterly.
Volume (Year): 55 (2009)
Issue (Month): 4 ()
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Other versions of this item:
- Herrmann, Sabine, 2009. "Do we really know that flexible exchange rates facilitate current account adjustment? Some new empirical evidence for CEE countries," Discussion Paper Series 1: Economic Studies 2009,22, Deutsche Bundesbank, Research Centre.
- F3 - International Economics - - International Finance
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
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