Measuring and modeling the effects of G-3 exchange rate fluctuations on small open economies: A natural experiment

Slavi Slavov ()

Economic Systems, 2008, vol. 32, issue 3, 253-273

Abstract: I present evidence that exchange rate fluctuations among the world's major currencies significantly affect the business cycles of small open economies. The impact of those fluctuations on any given country depends crucially on its exchange rate regime. The three Baltic countries in Central Europe constitute an interesting natural experiment in that regard. I estimate a structural vector autoregression (VAR) model to show the differential impact of euro-dollar exchange rate fluctuations on the business cycles of these three countries. Next, I build a dynamic sticky-price model and I calibrate it to the Baltic States in order to match and explain the empirical evidence.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0939-3625(08)00033-2
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:32:y:2008:i:3:p:253-273

Access Statistics for this article

Economic Systems is currently edited by R. Frensch

More articles in Economic Systems from Elsevier Contact information at EDIRC.
Bibliographic data for series maintained by Catherine Liu ().