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Monetary Commitment and Structural Reforms: A Dynamic Panel Analysis for Transition Economies

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  • Belke, Ansgar H.

    (University of Duisburg-Essen)

  • Vogel, Lukas

    (European Commission)

Abstract

This paper examines the contemporaneous relationship between the exchange rate regime and structural economic reforms for a sample of CEEC/CIS transition countries. We investigate empirically whether structural reforms are complements or substitutes for monetary commitment in the attempt to improve macroeconomic performance. Both EBRD and EFW data suggest a negative relationship between flexible exchange rate arrangements and external liberalization. Another finding from the EFW sample is that economic liberalisation has tended to be stronger under better macroeconomic fundamentals, suggesting that the impact of good macroeconomic conditions as facilitating structural reforms outweighs countervailing effects in the sense of lower reform pressure.

Suggested Citation

  • Belke, Ansgar H. & Vogel, Lukas, 2012. "Monetary Commitment and Structural Reforms: A Dynamic Panel Analysis for Transition Economies," IZA Discussion Papers 6775, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6775
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    References listed on IDEAS

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    1. Schönfelder, Nina & Wagner, Helmut, 2015. "The impact of European integration on institutional development," MPRA Paper 63392, University Library of Munich, Germany.

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    More about this item

    Keywords

    political economy of reform; panel data; structural reform; transition countries; exchange rate regime;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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