| |
| |
other seminars /
lectures / conferences |
|
 |
Cezary Wojcik, Polish Academy of Sciences and Warsaw
School of Economics |
| |
Catching Up: the Role of Demand-
and Supply-Side Effects on the Real Exchange Rates of Accession
Countries (joint paper with Ronald MacDonald, Strathclyde University,
Glasgow)
wiiw, 13 November 2002, 1:30 p.m. |
|
The main aim of the paper is to examine the exchange rate behaviour
of a group of four transitional, EU accession countries, with
a view to making policy recommendations regarding their accession
to full European Monetary Union. We employ the dynamic panel
OLS estimator to investigate relative importance of demand and
supply influences on the exchange rates of these countries.
Our analysis shows that although supply-side effects are likely
to be important for the accession countries, it seems highly
likely that demand-side influences will also be important determinants
of inflation differentials and, as we shall argue in this paper,
such demand-side effects are likely to have a deleterious effect
on inflation and competitiveness. An additional focus of the
paper is on examining the role that administrative prices and
the productivity of the distribution sector play in real exchange
rate dynamics in these countries. Based on a unique database
we show that administrative prices have been a powerful force
behind price and real exchange rate developments in these countries.
The distribution sector has an independent effect on the internal
price ratio over-and-above that generated by BS effect.
Keywords: exchange rate, monetary integration, EMU
JEL classification: F3, F36 |
| |
|
|
