nep-tra New Economics Papers
on Transition Economics
Issue of 2005‒04‒09
two papers chosen by
Toño Sanchez
Universitat de Valencia

  1. The feasibility of a fixed exchange rate regime for new EU-members: evidence from real exchange rates By Candelon,Bertrand; Kool,Clemens; Raabe,Katharina; Veen,Tom,van
  2. Energy Consumption and GDP in Market and Transitional Economies By Ageeva Svetlana; Suslov Nikita

  1. By: Candelon,Bertrand; Kool,Clemens; Raabe,Katharina; Veen,Tom,van (METEOR)
    Abstract: In this paper, we estimate fundamental bilateral real exchange rates for a group of eight accession countries using a panel-cointegration approach for the period 1993-2003. We document a significant positive link between productivity levels and the corresponding real exchange rate levels. Future rises in productivity cannot be excluded on the basis of either our own analysis or the literature as a whole. Consequently, inflation pressure and real exchange rate appreciation in the accession countries probably remain a fact of life in the near future. The extent to which this is a problem for a fixed nominal exchange rate regime is hard to determine. Price dynamics in the accession countries are still quite flexible to accommodate substantial real exchange rate movements even when the nominal exchange rate is rather fixed; moreover, that price adjustment is mostly an internal process for the accession countries. Overall we conclude that a fixed exchange rate regime for each of the accession countries would be feasible in itself, despite possible future real exchange rate appreciations due to either the Balassa-Samuelson effect or demand shifts. We find current misalignments to be small, robust and generally in line with the literature. This implies current exchange rate levels provide a reasonable indication of the level at which a parity exchange rate could be set.
    Keywords: international economics and trade ;
    Date: 2005
  2. By: Ageeva Svetlana; Suslov Nikita
    Abstract: A cross-country analysis of factors affecting the levels of the energy intensity of production in the countries with both the market and the transitional economies is provided. Climatic conditions, variables of institutional environment, production structure variations and evaluations of unofficial economy shares are involved into consideration. These variables turned out to be significant when explaining the differences of energy intensity. We construct regressions for both the values of absolute levels and their time change indices involving 1993, 1995, 1996 and 2000 statistics. We show that the quality of institutional environment directly affects the process of energy consumers' adjustment to energy price changes: the higher is the institutions' quality the more effective are the measures aimed at the energy conservation. The samples used include up to 117 economies.
    Keywords: Russia, energy intensity, institutions, prices, unofficial economy
    JEL: C21 O13
    Date: 2005–04–01

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