How would a fixed-exchange-rate regime fit the transition economies?

Creel, Jérôme; Levasseur, Sandrine

doi:10.3917/reof.075.0083

Cited by 8 publications

(5 citation statements)

References 17 publications

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“…Flexibility has often been introduced in steps, and some subjective decisions have to be made on the estimation period, trading off regime shifts within the sample against the need to have a sufficiently large number of observations. Mitigating this trade off, (non-multiplicative) dummies are included to account for changes in monetary and exchange rate regimes, as well as exceptional periods, following Creel and Levasseur (2003) and Süppel (2003) (see Table 2). full exchange rate flexibility was introduced onl y in mid-2001, with the wi dening of the e xchange r ate ba nd to ±15 pe rcent, the numbe r of obse rvations sinc e tha t time would be too small and the estimation is carried out over the longer period from mid-1995 onwards, with a dummy propos ed for the widening of th e bands i n mid-2001; results accordingly should be interpreted with particular care.…”

Section: Estimation Period Methodology and Data A Estimation Periodmentioning

confidence: 99%

Exchange Rates in Central Europe: A Blessing or a Curse?

Borghijs¹,

Kuijs

2004

SSRN Journal

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Section: Estimation Period Methodology and Data A Estimation Periodmentioning

confidence: 99%

Exchange Rates in Central Europe: A Blessing or a Curse?

Borghijs¹,

Kuijs

2004

SSRN Journal

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“…In the Eastern Europe, Czech Republic was under the fixed exchange rate regime against Deutsche Mark (DM) when the Czech Republic was struck by currency crisis in 1997. According to a study by Creel and Levasseur (2004), the root cause of the crisis was excessive credit to the firms by the state-owned banks and on the other hand, the firms did not go for restructuring and lost competitiveness. Consequently, the external imbalances engulfed the economy.…”

Section: Literature Reviewmentioning

confidence: 99%

Inflation Targeting, Exchange Rate and Financial Globalization

Tahir

2011

SSRN Journal

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In this paper we investigate the impact of financial globalization on the behaviour of inflation targeting emerging market economies with respect to exchange ratedo central banks respond to exchange rate movements or not. We use quarterly data for six emerging market inflation targeting economies from the date of their inflation targeting adoption to 2009 Q4. The study uses small open economy new Keynesian model à la Gali and Monacelli (2005), and employs multi-equation GMM technique to investigate the relationship. We find that the response of central bank to the exchange rate in case of Brazil, Chile, Mexico and Thailand is statistically significant while insignificant for Korea and Czech Republic. Theoretically, it should not be so as even under flexible inflation targeting central bank responds to inflation deviation and output gap; we think that the peculiar characteristics of emerging markets, like fear of floating, weak financial system and low level of central bank credibility make exchange rate important for these economies.

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“…22. In this Special Issue, the reader is referred to Cazes (2004) for existing labour market rigidities in CEECs, and Creel and Levasseur (2004) for an alternative evaluation of the costs related to the renunciation of exchange rate and monetary policies. This is not actually a very interesting argument because acceding countries are now in the maturity phase of their transition process.…”

Section: Sandrine Levasseur 1 13mentioning

confidence: 99%

“…36. The drift in public finances is documented for the Czech Republic, Poland and Hungary by Creel and Levasseur (2004). rise to intense discussions between candidates and EU officials.…”

Section: Balancing Costs and Benefits From Euroisation Against A Regulated Introduction Of The Euro: Summary And Challenges Aheadmentioning

confidence: 99%

Why not euroisation?

Levasseur¹

2004

Revue De l'OFCE

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Special issueThe debate about unilateral euroisation (i.e. the unilateral adoption of the euro as legal tender) that emerged in CEECs at the end of the 1990s has finally ebbed in 2000 following the very negative reaction of the EU officials. We argue, however, that we may potentially see a renewal of the debate in the future if the institutional path set by EU to introduce the euro is not modified. Indeed, both the political and the economic context are now radically different from the ones existing in 2000. In this paper, two main lines of argument are developed. First, the credibility of (implicit) sanctions in the event of unilateral euroisation is currently very low, even nil, because acceding countries are now de facto economically and politically integrated into the EU. Second, the recent economic slowdown and a recovery that has not been as strong and fast as expected, have resulted in a halt to the nominal convergence process that may delay their entry in EMU. Given the risk of unilateral euroisation, we argue that either consensual euroisation or, at least, a relaxation of nominal convergence criteria would be a better option from the viewpoint of both current and future members of EU.

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How would a fixed-exchange-rate regime fit the transition economies?

Cited by 8 publications

References 17 publications

Exchange Rates in Central Europe: A Blessing or a Curse?

Exchange Rates in Central Europe: A Blessing or a Curse?

Inflation Targeting, Exchange Rate and Financial Globalization

Why not euroisation?

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