Comparative analysis of the exchange market pressure in Central European countries with the Eurozone membership perspective
AbstractThis paper estimates the exchange market pressure (EMP) in four Central European countries (Czech Republic, Hungary, Poland, Slovakia) during the period 1993-2006. Therefore, it is one of very few studies focused on this region and the very first paper applying concurrently model-dependent as well as model-independent approach to the EMP estimation on these countries. The results obtained suggest that the approaches are not compatible and lead to absolutely inconsistent findings. They often differ in both identification of principal development trends and estimated magnitude and direction of the pressure. Therefore, any general conclusion on those issues is hard to draw. The paper provides evidence that a shift in the exchange rate regime towards the quasi-fixed ERM II should not lead to increasing EMP. However, it is highly probable that some episodes of the excessive EMP will make the fulfillment of the exchange rate stability criterion more difficult in all countries analyzed unless the criterion will have eased.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 3906.
Date of creation: 28 Jun 2007
Date of revision:
exchange market pressure; model-dependent approach; model-independent approach; EU New Member States; exchange rate stability criterion;
Find related papers by JEL classification:
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- F31 - International Economics - - International Finance - - - Foreign Exchange
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-07-13 (All new papers)
- NEP-CBA-2007-07-13 (Central Banking)
- NEP-EEC-2007-07-13 (European Economics)
- NEP-IFN-2007-07-13 (International Finance)
- NEP-MAC-2007-07-13 (Macroeconomics)
- NEP-MON-2007-07-13 (Monetary Economics)
- NEP-TRA-2007-07-13 (Transition Economics)
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