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Exchange rate regimes in the transition economies: Case study of the Czech Republic: 1990-1997

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  • Horvath, Julius
  • Jonas, Jiri

Abstract

In this paper we re-examine the experience of the Czech Republic with the exchange rate regime during the period 1990-97. We review arguments for and against choosing a peg as they appeared in the early 1990s. Then, we evaluate the success of the peg in curbing inflationary pressures stemming from price liberalization. We also show some of its unpleasant consequences. In the second part of the paper we discuss the macroecononomic precedents which most likely led to the abandoning of the peg in May 1997. Finally, we present some thoughts on possible exchange rate developments, especially with respect to a potential future membership in the European Monetary Union.

Suggested Citation

  • Horvath, Julius & Jonas, Jiri, 1998. "Exchange rate regimes in the transition economies: Case study of the Czech Republic: 1990-1997," ZEI Working Papers B 11-1998, University of Bonn, ZEI - Center for European Integration Studies.
    • Handle: RePEc:zbw:zeiwps:b111998
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    Cited by:

    1. Wojciech Maliszewski, 2002. "Monetary Policy in Transition: Structural Econometric Modelling and Policy Simulations," CASE Network Studies and Analyses 0246, CASE-Center for Social and Economic Research.
    2. Mohd Hussain Kunroo, 2015. "Theory of Optimum Currency Areas," Review of Market Integration, India Development Foundation, vol. 7(2), pages 87-116, August.
    3. Horvath, Roman & Komarek, Lubos, 2002. "Optimum Currency Area Theory: A Framework for Discussion about Monetary Integration," Economic Research Papers 269460, University of Warwick - Department of Economics.
    4. Mark Hallerberg & Lúcio Vinhas de Souza & William Roberts Clark, 2002. "Political Business Cycles in EU Accession Countries," European Union Politics, , vol. 3(2), pages 231-250, June.
    5. Jesús Crespo‐Cuaresma & Jarko Fidrmuc & Ronald MacDonald, 2005. "The monetary approach to exchange rates in the CEECs," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(2), pages 395-416, April.
    6. Julius Horvath, 1999. "The May 1997 Currency Crisis in the Czech Republic," Post-Communist Economies, Taylor & Francis Journals, vol. 11(3), pages 277-298.
    7. Jesús Crespo-Cuaresma & Jarko Fidrmuc & Ronald MacDonald, 2003. "The Monetary Approach to Exchange Rates in the CEECs Relations and Output Performance," Vienna Economics Papers vie0313, University of Vienna, Department of Economics.

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