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.
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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