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The convergence dynamics of a transition economy: The case of the Czech Republic

  • Bruha, Jan
  • Podpiera, Jirí
  • Polák, Stanislav

In this paper we develop a two-country dynamic general equilibrium model by means of which we seek to explain the long-run path of a transition economy. The model's novel feature is the inclusion of quality investment in the standard framework of applied general equilibrium two-country models. This feature is necessary to explain the trend in the real exchange rate. We present an application to the Czech economy.

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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 27 (2010)
Issue (Month): 1 (January)
Pages: 116-124

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Handle: RePEc:eee:ecmode:v:27:y:2010:i:1:p:116-124
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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  11. Bruha, Jan & Podpiera, Jirí, 2007. "Transition economy convergence in a two-country model: implications for monetary integration," Working Paper Series 0740, European Central Bank.
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  18. Juillard, Michel & Laxton, Douglas & McAdam, Peter & Pioro, Hope, 1998. "An algorithm competition: First-order iterations versus Newton-based techniques," Journal of Economic Dynamics and Control, Elsevier, vol. 22(8-9), pages 1291-1318, August.
  19. Jiri Podpiera & Marie Rakova, 2006. "Degree of Competition and Export-Production Relative Prices when the Exchange Rate Changes: Evidence from a Panel of Czech Exporting Companies," Working Papers 2006/10, Czech National Bank, Research Department.
  20. Gilli, Manfred & Pauletto, Giorgio, 1998. "Krylov methods for solving models with forward-looking variables," Journal of Economic Dynamics and Control, Elsevier, vol. 22(8-9), pages 1275-1289, August.
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