The Monetary Approach to Exchange Rates in the CEECs Relations and Output Performance
Jesús Crespo-Cuaresma (),
Jarko Fidrmuc () and
Ronald MacDonald ()
Authors registered in the RePEc Author Service: Jesus Crespo Cuaresma ()
Vienna Economics Papers from University of Vienna, Department of Economics
A panel data set for six Central and Eastern European countries (the Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia) is used to estimate the monetary exchange rate model with panel cointegration methods, including the Pooled Mean Group estimator, the Fully Modified Least Square estimator and the Dynamic Least Square estimator. The monetary model is able to convincingly explain the long-run dynamics of exchange rates in CEECs, particularly when this is supplemented by a Balassa-Samuelson effect. We then use our long-run monetary estimates to compute equilibrium exchange rates. Finally, we discuss the implications for the accession of selected countries to the European Economic and Monetary Union.
JEL-codes: C33 F31 F36 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-eec
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Persistent link: https://EconPapers.repec.org/RePEc:vie:viennp:0313
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