EXCHANGE RATES AND THE MEASUREMENT OF AGRICULTURAL PRICE DISTORTIONS IN CEECs AND OF CEEC-EU ACCESSION COSTS

Štefan Bojnec (), Wolfgang Munch and Johan Swinnen

No 31863, PRG Working Papers from Katholieke Universiteit Leuven, LICOS - Centre for Institutions and Economic Performance

Abstract: Exchange rates were heavily distorted under the central planning system in Central and Eastern Europe and are still adjusting in the transition process. The use of nominal exchange rates introduces a bias for international price comparisons and in calculations based on them. We present various exchange rates and discuss their relevance and usefulness for CEEC economic transition studies. We show that calculations of agricultural price distortions, protection rates and budgetary costs of EU-CEEC accession are sensitive to the exchange rate assumptions. More specifically, our simulations of EU-CEEC integration effects show that net exports are substantially smaller and budgetary costs less under the assumption of continued real appreciation of the CEC-4 currencies. However, the calculations also show that even under the extreme assumption of full adjustment to PPPs, the total budgetary costs remain large and GATT commitments on the maximum quantity of subsidized exports are still prohibiting an introduction of an unreformed CAP in the CEC-4.

Keywords: Demand and Price Analysis; International Relations/Trade (search for similar items in EconPapers)
Pages: 24
Date: 1997
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://ageconsearch.umn.edu/record/31863/files/prg-wp10.pdf (application/pdf)

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:ags:kuliwp:31863

DOI: 10.22004/ag.econ.31863

Access Statistics for this paper

More papers in PRG Working Papers from Katholieke Universiteit Leuven, LICOS - Centre for Institutions and Economic Performance Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().