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Which Exchange Rate Regime in Central European Countries?

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  • Patrick Artus
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    Abstract

    The paper first compares the monetary and exchange-rate policies conducted in the CEECs and by one of the neighbouring countries of the United States (Mexico). It is shown that Mexico has implemented reasonably expansionary policies, boosting production while avoiding financial imbalances and inflation, whereas in the CEECs policies are more rigid, and have led to the appearance of imbalances. The paper discusses possible causes of these differences, other than the exchange rate strategy of the countries. It uses a theoretical two-country model (a “large” country and a “small” country) to analyse the optimal exchange-rate policy in the small country.

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    File URL: http://www.cepii.fr/IE/rev102/rev102b.htm
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    Bibliographic Info

    Article provided by CEPII research center in its journal Economie Internationale.

    Volume (Year): (2005)
    Issue (Month): 102 ()
    Pages: 33-57

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    Handle: RePEc:cii:cepiei:2005-2tb

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    Related research

    Keywords: Exchange rate policy; international comparison; monetary policy;

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