Construction and Assessment of a Mixed Exchange Policy Indicator: Explanation of Polish Inflation
AbstractThe impact of exchange policy on macroeconomic targets (growth, inflation…) is rather difficult to assess empirically. There is a lack of accurate quantitative tools to define the strategy used, then a dummy variable (fixed or floating rate) is generally used in econometric studies. This paper tries to provide an indicator to measure the trade-off between nominal anchor and real target strategies in open economies. Unlike traditional dummies, it allows a mixed strategy (generally observed) in the managing of the exchange rate, according to external and internal constraints. The analysis of Poland's exchange policy since 1990 shows this trade-off, since monetary authorities have softened their nominal anchor policy to avoid excessive real appreciation. An econometric estimation of Polish inflation is used to test the validity of the indicator suggested. The results confirm not only the classical determinants of inflation, but also the validity of our mixed exchange policy indicator.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CERDI in its series Working Papers with number 199818.
Date of creation: 1998
Date of revision:
Indicator; Exchange policy; Poland;
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vincent Mazenod).
If references are entirely missing, you can add them using this form.