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Have real exchange rates and competitiveness in Central and Eastern Europe fundamentally changed?

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  • Cuestas, Juan Carlos
  • Monfort, Mercedes
  • Ordóñez, Javier

Abstract

In this paper we analyse the evolution of the RER and its main fundamentals for a group of Central and Eastern European countries. We focus particularly on the possibility of structural breaks in the relationship. We find clear evidence of breaks, mainly caused by the great recession. We find that a combination of both supply-side and demand-side effects are behind the variations in the real exchange rate, and overall, capital inflows have contributed to improve competitiveness in these countries.

Suggested Citation

  • Cuestas, Juan Carlos & Monfort, Mercedes & Ordóñez, Javier, 2024. "Have real exchange rates and competitiveness in Central and Eastern Europe fundamentally changed?," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 618-628.
    • Handle: RePEc:eee:reveco:v:89:y:2024:i:pa:p:618-628
    DOI: 10.1016/j.iref.2023.07.072
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    References listed on IDEAS

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    More about this item

    Keywords

    Real exchange rates; Central and eastern europe; Structural breaks; European integration;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F15 - International Economics - - Trade - - - Economic Integration

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