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De jure versus de facto Exchange Rate Stabilization in Central and Eastern Europe

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  • Gunther Schnabl

    (Tübingen University)

Abstract

The IMF classifications of the Central and Eastern European (CEE) exchange rate arrange-ments 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 dis- cussion about the accuracy of IMF exchange rate arrangement classifications, low- and high-frequency exchange rate stability in Central and Eastern Europe is explored. De facto ex-change 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.

Suggested Citation

  • Gunther Schnabl, 2004. "De jure versus de facto Exchange Rate Stabilization in Central and Eastern Europe," International Finance 0404013, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpif:0404013
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    Cited by:

    1. Hager, Svenja & Schöbel, Rainer, 2006. "Deriving the dependence structure of portfolio credit derivatives using evolutionary algorithms," Tübinger Diskussionsbeiträge 300, University of Tübingen, School of Business and Economics.
    2. Zaby, Alexandra K., 2009. "The propensity to patent in oligopolistic markets," Tübinger Diskussionsbeiträge 323, University of Tübingen, School of Business and Economics.
    3. Felbermayr, Gabriel J. & Toubal, Farid, 2010. "Cultural proximity and trade," European Economic Review, Elsevier, vol. 54(2), pages 279-293, February.
    4. Yalcin, Erdal, 2007. "The proximity-concentration trade-off in a dynamic framework," Tübinger Diskussionsbeiträge 312, University of Tübingen, School of Business and Economics.
    5. Gunther Schnabl, 2004. "International Capital Markets, Macroeconomic Stability, and Exchange Rate Stabilization in the CIS and East Asia," International Finance 0410009, University Library of Munich, Germany, revised 01 Mar 2005.
    6. Heger, Diana & Zaby, Alexandra K., 2009. "The propensity to patent with horizontally differentiated products: An empirical investigation," Tübinger Diskussionsbeiträge 324, University of Tübingen, School of Business and Economics.
    7. Frömmel, Michael & Schobert, Franziska, 2006. "Monetary Policy Rules in Central and Eastern Europe," Hannover Economic Papers (HEP) dp-341, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    8. Pitterle, Ingo & Steffen, Dirk, 2004. "Welfare Effects of Fiscal Policy under Alternative Exchange Rate Regimes : The Role of the Scale Variable of Money Demand," Tübinger Diskussionsbeiträge 284, University of Tübingen, School of Business and Economics.
    9. Heger, Diana & Zaby, Alexandra K., 2009. "The propensity to patent with vertically differentiated products: An empirical investigation," Tübinger Diskussionsbeiträge 325, University of Tübingen, School of Business and Economics.
    10. Schnabl, Gunther, 2005. "International Capital Markets and Informal Dollar Standards in the CIS and East Asia," Discussion Paper Series 26192, Hamburg Institute of International Economics.
    11. Schüle, Tobias, 2006. "Creditor coordination with social learning and endogenous timing of credit decisions," Tübinger Diskussionsbeiträge 307, University of Tübingen, School of Business and Economics.
    12. Frontczak, Robert, 2009. "Valuing options in Heston's stochastic volatility model: Another analytical approach," Tübinger Diskussionsbeiträge 326, University of Tübingen, School of Business and Economics.
    13. Frontczak, Robert & Schöbel, Rainer, 2008. "Pricing American options with Mellin transforms," Tübinger Diskussionsbeiträge 319, University of Tübingen, School of Business and Economics.
    14. Dymke, Björn M. & Walter, Andreas, 2006. "Insider trading in Germany: Do corporate insiders exploit inside information?," Tübinger Diskussionsbeiträge 309, University of Tübingen, School of Business and Economics.
    15. Rostek, Stefan & Schöbel, Rainer, 2006. "Risk preference based option pricing in a fractional Brownian market," Tübinger Diskussionsbeiträge 299, University of Tübingen, School of Business and Economics.
    16. Paul De Grauwe & Gunther Schnabl, 2004. "Exchange Rate Regimes and Macroeconomic Stability in Central and Eastern Europe," CESifo Working Paper Series 1182, CESifo.
    17. Spanjers, Willem, 2005. "Loss of confidence and currency crises," Economics Discussion Papers 2005-2, School of Economics, Kingston University London.
    18. Frommel, Michael & Schobert, Franziska, 2006. "Exchange rate regimes in Central and East European countries: Deeds vs. words," Journal of Comparative Economics, Elsevier, vol. 34(3), pages 467-483, September.
    19. Frontczak, Robert & Schöbel, Rainer, 2009. "On modified Mellin transforms, Gauss-Laguerre quadrature, and the valuation of American call options," Tübinger Diskussionsbeiträge 320, University of Tübingen, School of Business and Economics.
    20. Brandes, Julia & Schüle, Tobias, 2007. "IMF's assistance: Devil's kiss or guardian angel?," Tübinger Diskussionsbeiträge 310, University of Tübingen, School of Business and Economics.
    21. Radman Peša, Anita & Brajković, Ana, 2015. "Testing The ‘Black Swan Effect’ on Croatian Stock Market Between 2000 and 2013," MPRA Paper 69223, University Library of Munich, Germany, revised 2015.
    22. Maier, Ramona & Merz, Michael, 2008. "Credibility theory and filter theory in discrete and continuous time," Tübinger Diskussionsbeiträge 318, University of Tübingen, School of Business and Economics.
    23. Anita Radman Peša & Mejra Festić, 2012. "Testing the "EU Announcement Effect" on Stock Market Indices and Macroeconomic Variables in Croatia Between 2000 and 2010," Prague Economic Papers, University of Economics, Prague, vol. 2012(4), pages 450-469.
    24. repec:prg:jnlpep:v:2013:y:2013:i:4:id:434:p:450-469 is not listed on IDEAS

    More about this item

    Keywords

    Foreign Exchange Policy; EMU; Euro Zone; Central and Eastern Europe;

    JEL classification:

    • F3 - International Economics - - International Finance
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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