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RESEARCH AND ANALYSIS:  WORKING PAPERS
Exchange Rate Regimes and the Stability of Trade Policy in Transition Economies  

This paper examines the interplay between exchange rate regimes and policies and commercial policy in six transition economies.

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No: ERAD-98-07 

Authors:

  • Zdenek Drabek 
    World Trade Organization 
  • Josef C. Brada 
    Arizona State University 

Manuscript date: September 1998 

Abstract  Back to top

This paper examines the interplay between exchange rate regimes and policies and commercial policy in six transition economies. In all these economies the rate of protection afforded domestic industry by the exchange rate has been eroded by high rates of inflation and insufficient growth in productivity. As a result, there has been pressure on governments to increase trade barriers and each country examined has had recourse to various means of restricting imports. We argue that more flexible management of the nominal exchange rate would be a preferable way of dealing with the real appreciation of these countries' currencies. exchange rates, trade policy, transition economies. 

Keywords  Back to top

Elections, political business cycles, fiscal policies, public expenditure, developing countries. 

JEL codes: [P33]; [F13]; [F33] 

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