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Exchange Rate Regimes and Macroeconomic Stability in Central and Eastern Europe

  • Paul De Grauwe

    (Catholic University Leuven)

  • Gunther Schnabl

    (Tübingen University)

The IMF classifications of the Central and Eastern European exchange rate arrangements are heterogeneous. While one group of countries reports tight pegs to the euro, a second group seems to have moved toward (more) exchange rate flexibility. Based on the recent discussion about the accuracy of IMF exchange rate arrangement classifications, low- and high-frequency exchange rate stability in Central and Eastern Europe is explored here. De facto exchange rate stabilization is found to be much more prevalent in Central and Eastern Europe than suggested by de jure exchange rate classifications. Most of the CEE countries peg their currencies to the euro, thereby contributing to a growing euro zone. Nevertheless, as exchange rate stabilization against the euro is pursued with different degrees and with different long-term drifts, intra-regional exchange rates are still far from being unified.

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Paper provided by EconWPA in its series International Finance with number 0404011.

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Length: 29 pages
Date of creation: 13 Apr 2004
Date of revision:
Handle: RePEc:wpa:wuwpif:0404011
Note: Type of Document - pdf; pages: 29
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