Exchange Rate Policy and Output Growth: The Experience of the Transition Economies of Central and Eastern Europe
This article examines the contribution of exchange rate policy to output growth in the transition economies of Central and Eastern Europe. The analysis identifies two major channels through which the exchange rate affects output. The first is the direct effect which operates on output through its impact on international price competitiveness. The second channel, the indirect one, relies on the close association between disinflation and growth in these countries. That is, to the extent that the exchange rate policy has contributed to lower inflation in these countries it has indirectly caused higher economic growth. The experience of these economies as well as the results of a preliminary empirical analysis strongly suggest that both channels are very important to output growth. In addition, the analysis indicates that a fixed exchange rate regime during the transition process may serve the growth objective better since, to the extent that it is more effective in reducing inflation, it exerts a positive influence on output growth through the direct channel as well.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 11 (1999)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/CPCE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/CPCE20|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bruno, Michael & Easterly, William, 1995.
"Inflation crises and long-run growth,"
Policy Research Working Paper Series
1517, The World Bank.
- Peter Montiel & Bijan B. Aghevli & Mohsin S. Khan, 1991. "Exchange Rate Policy in Developing Countries: Some Analytical Issues," IMF Occasional Papers 78, International Monetary Fund.
- Guillermo Calvo & Eduardo Borensztein & Paul R. Masson & Manmohan S. Kumar, 1993. "Financial Sector Reforms and Exchange Arrangements in Eastern Europe," IMF Occasional Papers 102, International Monetary Fund.
- Mohsin S. Khan & Dimitri G. Demekas, 1991. "The Romanian Economic Reform Program," IMF Occasional Papers 89, International Monetary Fund.
- Paul R. Masson & Morris Goldstein & Jacob A. Frenkel, 1991. "Characteristics of a Successful Exchange Rate System," IMF Occasional Papers 82, International Monetary Fund.
- Dimitri G. Demekas & Mohsin S. Khan, 1991. "The Romanian Economic Reform Program," IMF Working Papers 91/80, International Monetary Fund.
- Corden, W Max, 1993. "Exchange Rate Policies for Developing Countries," Economic Journal, Royal Economic Society, vol. 103(416), pages 198-207, January.
- Bijan B. Aghevli & Eduardo Borensztein & Tessa Van der Willigen, 1992. "Stabilization and Structural Reform in the Czech and Slovak Federal Republic: First Stage," IMF Occasional Papers 92, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:taf:pocoec:v:11:y:1999:i:3:p:319-336. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.