Monetary convergence and risk premiums in the EU candidate countries

Lucjan Orlowski

No B 26-2002, ZEI Working Papers from University of Bonn, ZEI - Center for European Integration Studies

Abstract: This study examines the link between various monetary policy regimes and the ability to manage inflation and exchange rate risk premiums in the EU candidate countries as they undergo monetary convergence to the eurozone. The underlying hypothesis is that a system of 'flexible inflation targeting' may be an optimal policy choice for managing these two categories of risk. A model of inflation and exchange rate risk premiums within the context of inflation targeting is proposed. Recent trends in these risk premiums in Hungary, the Czech Republic and Poland are tested by using the GARCH (1,1) methodology.

Keywords: inflation risk premium; exchange rate risk premium; inflation targeting; monetary convergence; transition economies (search for similar items in EconPapers)
JEL-codes: E32 E52 P33 (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/39474/1/358443385.pdf (application/pdf)

Related works:
Working Paper: Monetary Convergence And Risk Premiums In The EU Candidate Countries (2005)
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:zbw:zeiwps:b262002

Access Statistics for this paper

More papers in ZEI Working Papers from University of Bonn, ZEI - Center for European Integration Studies Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().