Prague Economic Papers 2002, 11(2):135-147 | DOI: 10.18267/j.pep.192

Exchange rate, inflation and real economic growth in transitive economies

Jaroslava Durčáková, Martin Mandel
University of Economics, 4, W. Churchill Sq., CZ - 130 67 Prague 3.

In this paper we discuss the issue of the choice of exchange rate regimes in transitive economies and the effect of exchange rate policy on the development of macroeconomic indicators (e. g. the average growth rate of real GDP in domestic currency, the development of domestic inflation and the real exchange rate). Our analysis indicates that monetary and exchange rate policy is not a passive factor, at least in the medium term. Monetary policy should, in the first phases of transformation development, warn against two extremes: absolute stability even appreciation of the nominal exchange rate, or, on the contrary, chronic and severe depreciation.

Keywords: economic growth, exchange rate, inflation, transitive economies
JEL classification: E31, F43

Published: January 1, 2002  Show citation

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Durčáková, J., & Mandel, M. (2002). Exchange rate, inflation and real economic growth in transitive economies. Prague Economic Papers, 11(2), 135-147. doi: 10.18267/j.pep.192
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