Do we really know that flexible exchange rates facilitate current account adjustment? Some new empirical evidence for CEE countries
AbstractThis paper examines the relationship between the exchange rate regime and the pace of current account adjustment. The panel data set we refer to includes 11 catching-up countries from central, eastern and south-eastern Europe between 1994 and 2007. The exchange rate regime is measured by a continuous z-score measure of exchange rate volatility proposed by Gosh, Gulde and Wolf (2003). Based on a basic autoregression estimation, the results indicate that a more flexible exchange rate regime significantly enhances the rate of current account adjustment. --
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Bibliographic InfoPaper provided by Deutsche Bundesbank, Research Centre in its series Discussion Paper Series 1: Economic Studies with number 2009,22.
Date of creation: 2009
Date of revision:
Current account adjustment; exchange rate regime; Central and Eastern Europe;
Other versions of this item:
- Sabine Herrmann, 2009. "Do We Really Know That Flexible Exchange Rates Facilitate Current Account Adjustment? Some New Empirical Evidence for CEE Countries," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 55(4), pages 295-312.
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F31 - International Economics - - International Finance - - - Foreign Exchange
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-19 (All new papers)
- NEP-CBA-2009-09-19 (Central Banking)
- NEP-EEC-2009-09-19 (European Economics)
- NEP-IFN-2009-09-19 (International Finance)
- NEP-MON-2009-09-19 (Monetary Economics)
- NEP-OPM-2009-09-19 (Open Economy Macroeconomics)
- NEP-TRA-2009-09-19 (Transition Economics)
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