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Exchange Rate Developments and Fundamentals in Four EU Accession and Candidate Countries: Bulgaria, Croatia, Romania and Turkey

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This paper deals with exchange rate challenges in the four potential EU Member States Bulgaria, Croatia, Romania and Turkey. For the two countries with freely floating currencies, Romania and Turkey, we evaluate possible exchange rate misalignments based on a monetary model of exchange rate determination. In the case of Bulgaria and Croatia, two countries with currency board and narrow-band peg arrangements against the euro, we discuss possible exit strategies. We argue that a continuation of their current exchange rate regimes is likely to represent an optimal strategy for these countries in the run-up to both EU membership and the eventual adoption of the euro.

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  • Jesus Crespo Cuaresma & Jarko Fidrmuc & Maria Antoinette Silgoner, 2004. "Exchange Rate Developments and Fundamentals in Four EU Accession and Candidate Countries: Bulgaria, Croatia, Romania and Turkey," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 119-137.
    • Handle: RePEc:onb:oenbfi:y:2004:i:2:b:4
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    Cited by:

    1. Comunale, Mariarosaria, 2015. "Current account and REER misalignments in Central Eastern EU countries: an update using the macroeconomic balance approach," BOFIT Discussion Papers 28/2015, Bank of Finland Institute for Emerging Economies (BOFIT).
    2. Comunale, Mariarosaria, 2018. "Current account and real effective exchange rate misalignments in Central Eastern EU countries: An update using the macroeconomic balance approach," Economic Systems, Elsevier, vol. 42(3), pages 414-436.
    3. repec:onb:oenbfi:y:2004:i:2:b:6 is not listed on IDEAS
    4. repec:bof:bofitp:urn:nbn:fi:bof-201510131420 is not listed on IDEAS
    5. Mariarosaria Comunale, 2015. "Current Account and Reer Misalignments in Central Eastern EU Countries: an Update Using the Macroeconomic Balance Approach," Bank of Lithuania Working Paper Series 20, Bank of Lithuania.
    6. repec:zbw:bofitp:urn:nbn:fi:bof-201510131420 is not listed on IDEAS
    7. Mirjana cizmovic & Jelena Jankovic & Milenko Popovic, 2015. "Growth Anatomy of Croatian Economy," Ekonomija Economics, Rifin d.o.o., vol. 22(1), pages 159-216.
    8. Mariarosaria Comunale, 2019. "Long‐run determinants and misalignments of the real effective exchange rate in the EU," Scottish Journal of Political Economy, Scottish Economic Society, vol. 66(5), pages 649-672, November.
    9. Balázs Égert, 2004. "Equilibrium Exchange Rates in Southeastern Europe, Russia, Ukraine and Turkey: Healthy or (Dutch) Diseased?," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 138-181.
    10. repec:zbw:bofitp:2015_028 is not listed on IDEAS

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