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Which Exchange Rate Regime in Central European Countries?


  • Patrick Artus


The paper first compares the monetary and exchange-rate policies conducted in the CEECs and by one of the neighbouring countries of the United States (Mexico). It is shown that Mexico has implemented reasonably expansionary policies, boosting production while avoiding financial imbalances and inflation, whereas in the CEECs policies are more rigid, and have led to the appearance of imbalances. The paper discusses possible causes of these differences, other than the exchange rate strategy of the countries. It uses a theoretical two-country model (a “large” country and a “small” country) to analyse the optimal exchange-rate policy in the small country.

Suggested Citation

  • Patrick Artus, 2005. "Which Exchange Rate Regime in Central European Countries?," Economie Internationale, CEPII research center, issue 102, pages 33-57.
  • Handle: RePEc:cii:cepiei:2005-2tb

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    Exchange rate policy; international comparison; monetary policy;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F31 - International Economics - - International Finance - - - Foreign Exchange


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