On Some Currency Regime Considerations for the Visegrad Countries
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On Some Currency Regime Considerations for the Visegrad Countries
Editors: Heiduk, Günter | Horvath, Julius
Duisburger Volkswirtschaftliche Schriften, Vol. 39
(2003)
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This volume contains, for the most part, the papers and their formal discussions presented at an International Symposium "EUFORIKZ" (EURO, FORINT, KRONE, ZLOTY), held at Gerhard-Mercator-University Duisburg, Germany, on October 26-28, 2001. The focus of the volume lies on the following two questions:Firstly, which lessons can the Visegrad countries draw from exchange rate theory to choose the best strategy for monetary integration into the European Union? Secondly, which specific problems do the Visegrad countries face in their exchange rate policies?The first group of papers includes discussions of the policies of the European Central Bank, a general discussion of possible alternative options for the monetary integration of the accession countries, a discussion of the optimum currency area criteria with an emphasis on the endogeneity hypothesis, a discussion of inflation targeting and the proposal for euroization. The second group of papers analyzes specific problems of Poland, Hungary, the Czech Republic and the Slovak Republic on their way towards the accession to the European Union as well as towards the fulfillment of the Maastricht convergence criteria.Der Tagungsband enthält die Ergebnisse eines Internationalen Symposiums "EUFORIKZ", das vom 26.-28. Oktober 2001 an der Gerhard-Mercator-Universität Duisburg stattfand. Dabei standen folgende Fragen im Vordergrund des Interesses:Erstens, was können die Visegrad Länder von der Wechselkurstheorie für ihre eigene wechselkurspolitische Strategie lernen? Zweitens, mit welchen spezifischen Problemen haben diese Länder in ihrer Wechselkurspolitik zu kämpfen?In der ersten Gruppe der Beiträge werden Themen wie die Politik der Europäischen Zentralbank, die möglichen Alternativen für die monetäre Integration der Beitrittsländer, die Anwendung der Kriterien eines optimalen Währungsraumes unter Betonung der Endogenitätshypothese, inflation targeting sowie der Vorschlag der euroization behandelt. Die zweite Gruppe der Beiträge beschäftigt sich mit spezifischen Problemen Polens, Ungarns, der Tschechischen Republik und der Slovakischen Republik auf ihrem Weg in die Europäische Union wie auch auf dem Weg zur Erfüllung der Maastrichter Konvergenzkriterien.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Acknowledgement | 5 | ||
| Contents | 7 | ||
| Editors Introduction | 9 | ||
| Jürgen Jerger: The Monetary Policy of the ECB: Observations and Issues | 13 | ||
| I. Introduction | 13 | ||
| II. The Track Record | 14 | ||
| 1. Inflation | 14 | ||
| 2. Output | 18 | ||
| III. Policy Co-ordination in a Monetary Union | 23 | ||
| IV. Policy Rules for the ECB | 27 | ||
| 1. Transparency | 27 | ||
| 2. Voting Rules | 28 | ||
| 3. Which Monetary Policy Strategy for the ECB? | 29 | ||
| V. Concluding Remarks | 31 | ||
| VI. Ansgar Belke: Comment | 32 | ||
| References | 41 | ||
| Peter Backé / Cezary Wójcik: Alternative Options for the Monetary Integration of Central and Eastern European EU Accession Countries | 47 | ||
| I. Introduction | 47 | ||
| II. The Cost Side | 51 | ||
| III. The Benefit Side | 56 | ||
| IV. Conclusion | 60 | ||
| V. Volker Clausen: Comment | 60 | ||
| 1. Optimal Timing of the Adoption of the Euro | 62 | ||
| 2. Suggestions for Further Research | 64 | ||
| References | 65 | ||
| Jarko Fidrmuc: The Endogeneity of the Optimum Currency Area Criteria, Intraindustry Trade and EMU Enlargement | 69 | ||
| I. Introduction | 69 | ||
| II. The Optimum Currency Area Theory | 71 | ||
| 1. Endogeneity of Optimum Currency Area Criteria | 71 | ||
| III. Trade Integration and Business Cycles | 73 | ||
| 1. Intraindustry Trade and Business Cycles | 75 | ||
| 2. Sensitivity Analyses | 77 | ||
| IV. The Endogeneity Hypothesis of OCA Criteria and the EMU Enlargement | 79 | ||
| V. Trade Integration Between EU and CEECs | 80 | ||
| VI. Observed Convergence of Business Cycles in the EU and the CEECs | 82 | ||
| VII. Indices of Endogenous Optimum Currency Area | 84 | ||
| VIII. Conclusion | 85 | ||
| IX. Shin-Ichi Fukuda: Comment | 87 | ||
| References | 91 | ||
| Christopher Klisz: Are the Inflation and Exchange Rate Targets for Joining the European Single Currency Inconsistent? | 95 | ||
| I. Introduction | 95 | ||
| II. The Supply Side | 97 | ||
| III. The Domestic Price Level and Real Domestic Product | 99 | ||
| IV. General Equilibrium Conditions for Determining Nominal Prices | 102 | ||
| V. Cross-Country Cost of Living Index and the Nominal Exchange Rate | 105 | ||
| VI. The H-B-S Effect and the Maastricht Convergence Criteria | 106 | ||
| VII. Policy Implication for Accession Countries | 109 | ||
| VIII. Comment to the Paper by Christopher Klisz | 110 | ||
| References | 111 | ||
| Julius Horvath: Comments on Unilateral Euroization | 113 | ||
| I. Introduction | 113 | ||
| II. Discussion on Unilateral Euroization | 115 | ||
| 1. Proponents of Unilateral Euroization | 115 | ||
| 2. Opponents of Unilateral Euroization | 119 | ||
| III. Some Additional Comments | 121 | ||
| IV. Conclusion | 123 | ||
| V. Rainer Schweickert: Comment | 124 | ||
| References | 127 | ||
| Adam Budnikowski / Rafal Wielqdek: Polish Economy of 1990s in Perspective of the Convergence Criteria | 129 | ||
| I. Introduction | 129 | ||
| II. Inflation | 130 | ||
| III. Interest Rates | 135 | ||
| IV. Budget Deficit | 136 | ||
| V. Public Debt | 140 | ||
| VI. Exchange Rate Policy Evolution | 144 | ||
| 1. The Zloty’s Convertibility and the Liberalization of Capital Flows in Poland | 144 | ||
| 2. Exchange Rate Mechanisms | 147 | ||
| VII. Conclusion | 151 | ||
| VIII. Andrzej Kaźmierczak: Comment | 152 | ||
| Kàlman Dezséri: Exchange Rate Regime of Hungary and Approaching EMU Membership | 155 | ||
| I. Exchange Rate Policy in the Transition Economies – EU Enlargement and Joining EMU | 155 | ||
| II. Exchange Rate Regime of Hungary | 157 | ||
| III. Hungary’s Official View on Exchange Rate Regime Approaching EMU | 159 | ||
| IV. Economic Rationality | 163 | ||
| V. Volatility of Capital Flows and Exchange Rate Regime | 164 | ||
| VI. Inflation and the Exchange Rate Regime in Hungary | 168 | ||
| VII. Conclusion | 171 | ||
| VIII. Harald Sander: Comment | 172 | ||
| References | 175 | ||
| Josef Pöschl: Implications of the Introduction of Euro. The Case of the Czech Republic | 177 | ||
| I. Introduction | 177 | ||
| II. GDP Growth Rates as an Indication of the Strength of the Real Sector | 179 | ||
| III. Relations with the Rest of the World as Another Aspect of the Real Sector’s Strength | 181 | ||
| IV. Low Prices and Wages Compared to the EU to Attract Export-Oriented Foreign Direct Investment | 182 | ||
| V. Structural Problems | 185 | ||
| VI. Czech Monetary and Fiscal Policy | 185 | ||
| VII. The Czech Economy After the Introduction of Euro | 186 | ||
| VIII. Luboš Komárek: Comment | 189 | ||
| References | 191 | ||
| Julius Horvath: On Currency and Exchange Rate Regime. Example of Slovakia | 193 | ||
| I. Introduction | 193 | ||
| II. Political Economy Approach | 194 | ||
| III. Some Theoretical Considerations | 197 | ||
| IV. Implications for the Slovak Exchange Rate Regime | 200 | ||
| V. Conclusion | 205 | ||
| VI. Bas van Aarle: Comment | 206 | ||
| References | 207 | ||
| Contributors and Discussants | 211 |