Adjustment to the Asymmetric Shocks and Currency Unions: the Case of Belarus and Russia
Chernookiy Valery ()
Authors registered in the RePEc Author Service: Valery Charnavoki ()
EERC Working Paper Series from EERC Research Network, Russia and CIS
The paper analyzes mechanism of adjustment to the asymmetric shocks in terms of trade in possible currency union of Belarus and Russia. It is emphasized the role of real exchange rate in this process. An empirical analysis based on panel data confirms the asymmetric effect of fuel price changes on the equilibrium real exchange rate in two countries. At the same time, according to our estimates, real exchange rate changes affect significantly real output and its structure in Belarus. On the base of analysis provided, conclusion is made about necessity to create a fiscal stabilization mechanism which would allow to smooth negative effect of asymmetric shocks on Belarusian economy under currency union.
Keywords: Belarus; Russia; currency union; asymmetric shocks; terms of trade; real exchange rate. (search for similar items in EconPapers)
JEL-codes: C23 E42 F31 F33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis, nep-ifn, nep-mac, nep-mon and nep-tra
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