Some Exchange Rates Are More Stable than Others: Short-Run Evidence from Transition Countries
Ales Bulir ()
Working Papers from Czech National Bank, Research Department
The paper investigates empirically the endogenous liquidity nexus of exchange rate determination on a sample of four transition economies. We find evidence in favor of the hypothesis of a nonlinear error correction process vis-a-vis longer-term trend deviations. The results suggest that early and successful exchange-rate market and financial-account liberalization pays off in terms of depth of the market and, hence, faster adjustment of national currencies to short-term shocks to the exchange rate.
Keywords: Exchange rate; endogenous liquidity; error-correction mechanism; nonlinearity. (search for similar items in EconPapers)
JEL-codes: F31 F33 C32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ifn and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cnb:wpaper:2003/05
Access Statistics for this paper
More papers in Working Papers from Czech National Bank, Research Department Contact information at EDIRC.
Series data maintained by Jan Babecky ().