Exchange Rate Variability, Pressures and Optimum Currency Area Criteria: Lessons for the Central and Eastern European Countries
AbstractThis paper estimates the medium-term determinants of the bilateral exchange rate variability and exchange rate pressures for 20 developed countries in the 1990s. The results suggest that the optimum currency area criteria explain the dynamics of bilateral exchange rate variability and pressures to a large extent. Next, we predict exchange rate volatility and pressures for the Central and Eastern European Countries (CEECs). We find that the CEECs encounter exchange rate pressures at approximately the same level as the euro area countries did before they adopted the euro.
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Bibliographic InfoPaper provided by Czech National Bank, Research Department in its series Working Papers with number 2005/08.
Date of creation: Dec 2005
Date of revision:
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More information through EDIRC
Euro Adoption; Exchange Rates; GMM; Optimum Currency Area.;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- F31 - International Economics - - International Finance - - - Foreign Exchange
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-10 (All new papers)
- NEP-CBA-2006-06-10 (Central Banking)
- NEP-EEC-2006-06-10 (European Economics)
- NEP-FMK-2006-06-10 (Financial Markets)
- NEP-IFN-2006-06-10 (International Finance)
- NEP-MAC-2006-06-10 (Macroeconomics)
- NEP-MON-2006-06-10 (Monetary Economics)
- NEP-TRA-2006-06-10 (Transition Economics)
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