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Exchange rate regimes and the stability of trade policy in transition economies

Author

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  • Drabek, Zdenek
  • Brada, Josef C.

Abstract

This paper examines the interplay between exchange rate regimes and policies and commercial policy in six transition economies. In all these economies the rate of protection afforded domestic industry by the exchange rate has been eroded by high rates of inflation and insufficient growth in productivity. As a result, there has been pressure on governments to increase trade barriers and each country examined has had recourse to various means of restricting imports. We argue that more flexible management of the nominal exchange rate would be a preferable way of dealing with the real appreciation of these countries' currencies. exchange rates, trade policy, transition economies.

Suggested Citation

  • Drabek, Zdenek & Brada, Josef C., 1998. "Exchange rate regimes and the stability of trade policy in transition economies," WTO Staff Working Papers ERAD-98-07, World Trade Organization (WTO), Economic Research and Statistics Division.
  • Handle: RePEc:zbw:wtowps:erad9807
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    References listed on IDEAS

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    12. Anne O. Krueger, 1997. "Nominal Anchor Exchange Rate Policies as a Domestic Distortion," NBER Working Papers 5968, National Bureau of Economic Research, Inc.
    13. Dornbusch, Rudiger, 1976. "Expectations and Exchange Rate Dynamics," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1161-1176, December.
    14. Michael Mussa & Robert P Flood, 1994. "Issues Concerning Nominal Anchors for Monetary Policy," IMF Working Papers 94/61, International Monetary Fund.
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    Citations

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    Cited by:

    1. Bo??tjan Jazbec, 2002. "Real Exchange Rates in Transition Economies," William Davidson Institute Working Papers Series 482, William Davidson Institute at the University of Michigan.
    2. Coricelli, Fabrizio & Jazbec, Bostjan, 2004. "Real exchange rate dynamics in transition economies," Structural Change and Economic Dynamics, Elsevier, vol. 15(1), pages 83-100, March.
    3. David Barlow, 2004. "Purchasing Power Parity in Three Transition Economies," Economic Change and Restructuring, Springer, vol. 36(3), pages 201-221, September.
    4. Samuel Guérineau & Sylviane Guillaumont Jeanneney, 2002. "Un indicateur d'ancrage nominal par le taux de change : illustration par le cas polonais," Economie & Prévision, La Documentation Française, vol. 154(3), pages 139-155.
    5. Fernando Luengo & Ignacio Álvarez, 2007. "Integración Comercial y Dinámica Económica: España ante el Reto de la Ampliación," Working Papers del Instituto Complutense de Estudios Internacionales 0702, Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales.
    6. Brada, Josef C., 1998. "Introduction: Exchange Rates, Capital Flows, and Commercial Policies in Transition Economies," Journal of Comparative Economics, Elsevier, vol. 26(4), pages 613-620, December.
    7. Kemme, David M. & Roy, Saktinil, 2006. "Real exchange rate misalignment: Prelude to crisis?," Economic Systems, Elsevier, vol. 30(3), pages 207-230, October.
    8. Ali M. Kutan & Su Zhou, 2008. "The Enlargement of the European Union and the Behavior of Real Exchange Rates," Review of Development Economics, Wiley Blackwell, vol. 12(3), pages 550-561, August.
    9. Paul Hare, 2001. "Trade Policy During the Transition: Lessons from the 1990s," The World Economy, Wiley Blackwell, vol. 24(4), pages 482-512, April.
    10. Ali M. Kutan & Josef C. Brada, 1998. "The persistence of moderate inflation in the Czech Republic and the Koruna crisis of May 1997," Working Papers 1998-021, Federal Reserve Bank of St. Louis.
    11. Dibooglu, Selahattin & Kutan, Ali M., 2001. "Sources of Real Exchange Rate Fluctuations in Transition Economies: The Case of Poland and Hungary," Journal of Comparative Economics, Elsevier, vol. 29(2), pages 257-275, June.
    12. Kaminski, Bartlomiej, 1999. "The EU factor in the trade policies of Central European countries," Policy Research Working Paper Series 2239, The World Bank.
    13. repec:wsi:serxxx:v:55:y:2010:i:04:n:s0217590810004012 is not listed on IDEAS
    14. Seiha Ok & Makoto Kakinaka & Hiroaki Miyamoto, 2010. "Real Shock Or Nominal Shock? Exchange Rate Movements In Cambodia And Lao Pdr," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 55(04), pages 685-703.
    15. Samuel GUERINEAU, 1998. "Construction and Assessment of a Mixed Exchange Policy Indicator: Explanation of Polish Inflation," Working Papers 199818, CERDI.
    16. David Barlow, 2003. "Purchasing Power Parity in Three Transition Economies," Economic Change and Restructuring, Springer, vol. 36(3), pages 201-221, September.
    17. Constantine Michalopoulos, 2001. "The Integration of Transition Economies into the World Trading System," Revue d'Économie Financière, Programme National Persée, vol. 6(1), pages 64-89.
    18. Michalopoulos, Constantine, 1999. "The integration of transition economies into the world trading system," Policy Research Working Paper Series 2182, The World Bank.
    19. Horvath, Julius & Jonas, Jiri, 1998. "Exchange rate regimes in the transition economies: Case study of the Czech Republic: 1990-1997," ZEI Working Papers B 11-1998, University of Bonn, ZEI - Center for European Integration Studies.
    20. repec:ucm:wpaper:02-07 is not listed on IDEAS

    More about this item

    Keywords

    Elections; political business cycles; fiscal policies; public expenditure; developing countries;

    JEL classification:

    • P33 - Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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