IDEAS home Printed from https://ideas.repec.org/a/prg/jnlpep/v2002y2002i2id192.html
   My bibliography  Save this article

Exchange rate, inflation and real economic growth in transitive economies

Author

Listed:
  • Jaroslava Durčáková
  • Martin Mandel

Abstract

In this paper we discuss the issue of the choice of exchange rate regimes in transitive economies and the effect of exchange rate policy on the development of macroeconomic indicators (e. g. the average growth rate of real GDP in domestic currency, the development of domestic inflation and the real exchange rate). Our analysis indicates that monetary and exchange rate policy is not a passive factor, at least in the medium term. Monetary policy should, in the first phases of transformation development, warn against two extremes: absolute stability even appreciation of the nominal exchange rate, or, on the contrary, chronic and severe depreciation.

Suggested Citation

  • Jaroslava Durčáková & Martin Mandel, 2002. "Exchange rate, inflation and real economic growth in transitive economies," Prague Economic Papers, Prague University of Economics and Business, vol. 2002(2), pages 135-147.
    • Handle: RePEc:prg:jnlpep:v:2002:y:2002:i:2:id:192
    DOI: 10.18267/j.pep.192
    as

    Download full text from publisher

    File URL: http://pep.vse.cz/doi/10.18267/j.pep.192.html
    Download Restriction: free of charge
    File URL: http://pep.vse.cz/doi/10.18267/j.pep.192.pdf
    Download Restriction: free of charge
    File URL: https://libkey.io/10.18267/j.pep.192?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ofair Razin & Susan M. Collins, 1997. "Real Exchange Rate Misalignments and Growth," International Finance 9707001, University Library of Munich, Germany.
    2. Mr. Jonathan David Ostry & Ms. Anne Marie Gulde & Mr. Atish R. Ghosh & Holger C. Wolf, 1995. "Does the Nominal Exchange Rate Regime Matter?," IMF Working Papers 1995/121, International Monetary Fund.
    3. Dixit, Avinash K, 1989. "Entry and Exit Decisions under Uncertainty," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 620-638, June.
    4. Krugman, Paul, 1989. "The Case for Stabilizing Exchange Rates," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 5(3), pages 61-72, Autumn.
    5. John Williamson, 1981. "The Crawling Peg in Historical Perspective," Palgrave Macmillan Books, in: John Williamson (ed.), Exchange Rate Rules, chapter 1, pages 3-37, Palgrave Macmillan.
    6. Ofair Razin & Susan M. Collins, 1997. "Real Exchange Rate Misalignments and Growth," NBER Working Papers 6174, National Bureau of Economic Research, Inc.
    7. Heller, H Robert, 1978. "Determinants of Exchange Rate Practices," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 10(3), pages 308-321, August.
    8. Kocenda, Evzen, 1998. "Exchange rate in transition," MPRA Paper 32030, University Library of Munich, Germany.
    9. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72(6), pages 584-584.
    10. Johnson, Harry G, 1976. "Destabilizing Speculation: A General Equilibrium Approach," Journal of Political Economy, University of Chicago Press, vol. 84(1), pages 101-108, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yu Hsing, 2004. "Impacts of Macroeconomic Policies on Output in the Czech Republic: An Application of Romer's ISMP-IA Model," Prague Economic Papers, Prague University of Economics and Business, vol. 2004(4), pages 339-345.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. KAFANDO, Namalguebzanga, 2014. "L'industrialisation de l'Afrique: l'importance des facteurs structurels et du régime de change [The industrialization of Africa: the importance of structural factors and exchange rate regime]," MPRA Paper 68736, University Library of Munich, Germany.
    2. Ronald MacDonald & Flávio Vieira, "undated". "A panel data investigation of real exchange rate misalignment and growth," Working Papers 2010_13, Business School - Economics, University of Glasgow.
    3. Morvillier, Florian, 2020. "Do currency undervaluations affect the impact of inflation on growth?," Economic Modelling, Elsevier, vol. 84(C), pages 275-292.
    4. Cruz-Rodríguez, Alexis, 2015. "Crecimiento económico y desalineación del tipo de cambio real en la República Dominicana: ¿Hay alguna relación? [Economic growth and the real exchange rate misalignments in the Dominican Republic: ," MPRA Paper 70974, University Library of Munich, Germany.
    5. Marcel Schroder, 2013. "Should developing countries undervalue their currencies?," Departmental Working Papers 2013-12, The Australian National University, Arndt-Corden Department of Economics.
    6. Amor, Thouraya Hadj & Nouira, Ridha & Rault, Christophe & Sova, Anamaria Diana, 2023. "Real exchange rate misalignments and economic growth in Tunisia: New evidence from a threshold analysis of asymmetric adjustments," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 215-227.
    7. Ramos-Herrera María del Carmen, 2022. "How Equilibrium Exchange Rate Misalignments Influence on Economic Growth? Evidence for European Countries," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 16(1), pages 199-211, January.
    8. Paulo Gala & Claudio R. Lucinda, 2006. "Exchange Rate Misalignment and Growth: Old and New Econometric Evidence," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 7(4), pages 165-187.
    9. Schröder, Marcel, 2013. "Should developing countries undervalue their currencies?," Journal of Development Economics, Elsevier, vol. 105(C), pages 140-151.
    10. D’Adamo, Gaetano & Rovelli, Riccardo, 2015. "The role of the exchange rate regime in the process of real and nominal convergence," Journal of Macroeconomics, Elsevier, vol. 43(C), pages 21-37.
    11. Aykut Kibritcioglu & Bengi Kibritcioglu, 2004. "Real Exchange Rate Misalignment in Turkey, 1987-2003 (in Turkish)," Macroeconomics 0403006, University Library of Munich, Germany, revised 22 Apr 2004.
    12. Chernookiy Valery, 2005. "Adjustment to the Asymmetric Shocks and Currency Unions: the Case of Belarus and Russia," EERC Working Paper Series 05-07e, EERC Research Network, Russia and CIS.
    13. Urban, Dieter M., 2007. "Terms of trade, catch-up, and home-market effect: The example of Japan," Journal of the Japanese and International Economies, Elsevier, vol. 21(4), pages 470-488, December.
    14. Firat Demir & Arslan Razmi, 2022. "The Real Exchange Rate And Development Theory, Evidence, Issues And Challenges," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 386-428, April.
    15. Coudert, Virginie & Dubert, Marc, 2005. "Does exchange rate regime explain differences in economic results for Asian countries?," Journal of Asian Economics, Elsevier, vol. 16(5), pages 874-895, October.
    16. Florian Morvillier, 2019. "Do currency undervaluations affect the impact of inflation on growth?," Post-Print hal-02138677, HAL.
    17. Zouheir Abida, 2011. "Real Exchange Rate Misalignment and Economic Growth: An Empirical Study for the Maghreb Countries," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 45-61, July.
    18. Roni Frish, 2016. "The Real Exchange Rate in the Long Term," Bank of Israel Working Papers 2016.03, Bank of Israel.
    19. Prabheesh, K.P. & Prakash, Branesh & Vuniivi, Viliame, 2023. "Assessment of Fiji’s exchange rate," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1282-1305.
    20. Frait, Jan & Komarek, Lubos & Melecky, Martin, 2006. "The Real Exchange Rate Misalignment in the Five Central European Countries," Economic Research Papers 269632, University of Warwick - Department of Economics.

    More about this item

    Keywords

    economic growth; exchange rate; inflation; transitive economies;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prg:jnlpep:v:2002:y:2002:i:2:id:192. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stanislav Vojir (email available below). General contact details of provider: https://edirc.repec.org/data/uevsecz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.