Equilibrium exchange rates in transition countries : Evidence from dynamic heterogenous panel models
Kim, Byung-Yeon; Korhonen, Iikka (20.12.2002)
Numero
15/2002Julkaisija
Bank of Finland
2002
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:bof-201408072022Tiivistelmä
We use a dynamic heterogeneous panel model to estimate real equilibrium exchange rates for advanced transition countries.Our method is based on out-of-sample estimations from middle-income and high-income countries, and we use a pooled mean group estimator.We find that exchange rates have converged in recent years in five transition countries (Czech Republic, Hungary, Poland, Slovakia, and Slovenia) with real equilibrium exchange rates expressed in the US dollars.However, we also find that the currencies of the transition countries studied are substantially overvalued if real effective exchange rates are used. Keywords: exchange rates, transition economies, dynamic heterogeneous panel estimations JEL Classification: C33, F31, P27
Julkaisuhuomautus
Published in Economic Systems vol 29, no 2 (2005), pp. 144-162