Exchange Rates in the New EU Accession Countries: What Have We Learned from the Forerunners
Ales Bulir () and
Working Papers from Czech National Bank, Research Department
Estimation and simulation of sustainable real exchange rates in some of the new EU accession countries point to potential difficulties in sustaining the ERM2 regime if entered too soon and with weak policies. According to the estimates, the Czech, Hungarian, and Polish currencies were overvalued in 2003. Simulations, conditional on large-model macroeconomic projections, suggest that under current policies those currencies would be unlikely to stay within the ERM2 stability corridor during 2004-2010. In-sample simulations for Greece, Portugal, and Spain indicate both a much smaller misalignment of national currencies prior to ERM2, and a more stable path of real exchange rates over the medium term than can be expected for the new accession countries.
Keywords: ERM2; Foreign direct investment; Sustainable real exchange rates. (search for similar items in EconPapers)
JEL-codes: F31 F33 F36 F47 (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 (9) Track citations by RSS feed
Downloads: (external link)
http://www.cnb.cz/en/research/research_publication ... load/cnbwp102004.pdf
Journal Article: Exchange rates in the new EU accession countries: What have we learned from the forerunners? (2005)
Working Paper: Exchange Rates in the New EU Accession Countries; What Have We Learned from the Forerunners? (2005)
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:2004/10
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 ().