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Implicit exchange regimes in Central and Eastern Europe: A first exploration

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Ledesma Rodríguez, Francisco and Pérez Rodriguez, Jorge and Sosvilla-Rivero, Simón (2009) Implicit exchange regimes in Central and Eastern Europe: A first exploration. International Economics and Economic Policy, 6 (2). pp. 179-206. ISSN 1612-4812

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Official URL: https://doi.org/10.1007/s10368-009-0133-4



Abstract

This paper attempts to identify implicit exchange rate regimes for currencies of the Central and Eastern European Countries vis-à-vis the euro. To that end, we apply a sequential procedure that considers the dynamics of exchange rates to data covering the period from 1977:01 to 2006:02. Our results would suggest that implicit bands have existed in many subperiods for almost all currencies under study. Once we detect de facto discrepancies between de facto and de iure exchange rate regimes, we propose a model in order to explain these decisions. Our results suggest a positive association between the previous inflation rate and the probability of a peg with the euro, and a negative association with past unemployment rate.


Item Type:Article
Uncontrolled Keywords:Exchange rate regimes; Implicit fluctuation bands; Exchange rates.
Subjects:Social sciences > Economics > World economy
JEL:F31, F33
ID Code:59732
Deposited On:26 Mar 2020 11:02
Last Modified:30 Mar 2020 10:40

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