Equilibrium exchange rates in transition countries: Evidence from dynamic heterogenous panel models

Byung-Yeon Kim and Iikka Korhonen

No 15/2002, BOFIT Discussion Papers from Bank of Finland Institute for Emerging Economies (BOFIT)

Abstract: We use a dynamic heterogeneous panel model to estimate real equilibrium exchange rates for advanced transition countries.Our method is based on out-of-sample estimations from middle-income and high-income countries, and we use a pooled mean group estimator.We find that exchange rates have converged in recent years in five transition countries (Czech Republic, Hungary, Poland, Slovakia, and Slovenia) with real equilibrium exchange rates expressed in the US dollars.However, we also find that the currencies of the transition countries studied are substantially overvalued if real effective exchange rates are used.

Keywords: exchange rates; transition economies; dynamic heterogeneous panel estimations (search for similar items in EconPapers)
JEL-codes: C33 F31 P27 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Equilibrium exchange rates in transition countries: Evidence from dynamic heterogeneous panel models (2005)
Working Paper: Equilibrium Exchange Rates in Transition Countries: Evidence from Dynamic Heterogeneous Panel Models (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bofitp:bdp2002_015

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