The monetary approach to exchange rates in the CEECs

Arbeitspapier

A panel data set for six Central and Eastern European countries (the Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia) is used to estimate the monetary exchange rate model with panel cointegration methods, including the Pooled Mean Group estimator, the Fully Modified Least Square estimator and the Dynamic Least Square estimator.The monetary model is able to convincingly explain the long-run dynamics of exchange rates in CEECs, particularly when this is supplemented by a Balassa-Samuelson effect.We then use our long-run monetary estimates to compute equilibrium exchange rates.Finally, we discuss the implications for the accession of selected countries to the European Economic and Monetary Union.

Object Details

• ISBN: 951-686-876-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: BOFIT Discussion Papers ; No. 14/2003

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; Foreign Exchange ; Financial Aspects of Economic Integration
• Subject: Exchange rates ; monetary model ; panel unit root tests ; panel cointegration ; EMU

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Crespo Cuaresma, Jesús ; Fidrmuc, Jarko ; MacDonald, Ronald
• Event: Veröffentlichung
• (who): Bank of Finland, Institute for Economies in Transition (BOFIT)
• (where): Helsinki
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/212528
• Last update: 10.03.2025, 11:44 AM CET