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Exchange Rate Management and Inflation Targeting in the CEE Accession Countries Author info | Abstract | Publisher info | Download info | Related research | Statistics Fabrizio Iacone () (University of Bologna (Italy) and London School of Economics (GB))
Renzo Orsi () (University of Bologna (Italy))
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We consider a small structural model to describe the transmission mechanism of monetary policy and the dynamics of inflation. We first verify the validity of the general structure estimating it for Germany which represents a sort of benchmark model. At least one of the links required for the transmission mechanism of monetary policy, when we analyse the Central and Eastern European Countries (CEECs), reveals to be not significant when considered on the whole sample. On the contrary the results are closer to a textbook description when the attention is shifted to the second part of the sample only. We interpret this as a piece of evidence indicating that the transition is indeed operating, but it is still ongoing and in some cases it is not complete yet. We also verify that the effects of the exchange rate on both the aggregate demand and on the inflation are in agreement with the economic theory. We conclude that the exchange rate should be actively used to control the inflation in the CEECs.
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Paper provided by Free University Berlin, Jean Monnet Centre of Excellence in its series Eastward Enlargement of the Euro-zone Working Papers with number
wp08.
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Length: 28 pages
Date of creation: 01 Aug 2002Date of revision:
01 Aug 2002Handle: RePEc:ezo:ezppap:wp08Contact details of provider: Postal: Jean Monnet Centre of Excellence, Freie Universit�t Berlin, Ihnestrasse 22, D-14195 Berlin Web page: http://www.jmc-berlin.org More information through EDIRC
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Svensson, Lars E. O., 2000.
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Jaan Masso & Karsten Staehr, 2005.
"Inflation Dynamics And Nominal Adjustment In The Baltic States ,"
University of Tartu - Faculty of Economics and Business Administration Working Paper Series
35, Faculty of Economics and Business Administration, University of Tartu (Estonia).
[Downloadable!]
Other versions: Christian Fahrholz, 2003.
"Strategic Exchange-Rate Policy of Accession Countries in ERM II ,"
Eastward Enlargement of the Euro-zone Working Papers
wp14, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Apr 2003.
[Downloadable!]
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