Maintaining Competitiveness Under Equilibrium Real Appreciation: The Case of Slovakia
30 Pages Posted: 3 Mar 2006
Date Written: March 2005
Abstract
This paper evaluates competitiveness in Slovakia and estimates the equilibrium real exchange rate for the koruna. Slovak wages and prices are found to have been relatively low even when adjusted for differences in relative income and productivity, suggesting an undervalued real exchange rate. However, recent rapid nominal appreciation has reduced most or all of this undervaluation and has brought the real exchange rate near or above equilibrium. The productivity-driven equilibrium real appreciation rate during 2005-09 is estimated at close to 3 percent per year but can be lower with the help of fiscal consolidation.
Keywords: Real exchange rate, competitiveness, Balassa-Samuelson, Slovakia
JEL Classification: F31, E31
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
International Evidence on Tradables and Nontradables Inflation
-
By Matthew B. Canzoneri, Robert E. Cumby, ...
-
International Evidence on Tradables and Nontradable Inflation
-
Exchange Rates and Economic Fundamentals: A Methodological Comparison of Beers and Feers
By Peter B. Clark and Ronald Macdonald
-
Real Exchange Rates in the Developing Countries: Concepts and Measure- Ment
-
The EMS, the Emu, and the Transition to a Common Currency
By Kenneth Froot and Kenneth Rogoff
-
Real Exchange Rates and Productivity Growth in the United States and Japan
-
Asset Markets, Exchange Rates and the Balance of Payments
By Jacob A. Frenkel and Michael L. Mussa
-
By Enrique Alberola, Humberto Lopez, ...
-
Long-Run Exchange Rate Modeling: A Survey of the Recent Evidence