Exchange Rate Regime Choice in Central and Eastern European Transitional Economies
AbstractThe article develops a model of exchange rate regime choice centered on the tradeoff between internal price stability and external competitiveness. The model allows for institutional costs of altering exchange rate arrangements. The main implication of the model is a nonlinear relationship between the rate of inflation and the choice of regime for the next period. The model also suggests that a major inflationary shock, like the one to which all Central and Eastern European economies were subject when they allowed prices to be determined by the market, should give rise to a tightening of the exchange rate regime, followed by a gradual introduction of more flexibility as inflation subsides. A series of regressions on a sample of thirteen Central and Eastern European economies yield results consistent with the hypothesis. Comparative Economic Studies (2002) 44, 85–117; doi:10.1057/ces.2002.21
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Comparative Economic Studies.
Volume (Year): 44 (2002)
Issue (Month): 4 (December)
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- Neven T Valev, 2006.
"From a Currency Board to the Euro: Public Attitudes Toward Unilateral Euroisation in Bulgaria1,"
Comparative Economic Studies,
Palgrave Macmillan, vol. 48(3), pages 480-496, September.
- Neven T. Valev, 2005. "From a currency board to the euro: Public attitudes toward unilateral euroization in Bulgaria," William Davidson Institute Working Papers Series wp736, William Davidson Institute at the University of Michigan.
- Neven Valev, 2004. "From a Currency Board to the Euro: Public Attitudes toward Unilateral Euroization in Bulgaria," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0423, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- Jeffry Frieden & David Leblang & Neven Valev, 2010. "The political economy of exchange rate regimes in transition economies," The Review of International Organizations, Springer, vol. 5(1), pages 1-25, March.
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