#1998-022A "Sources of Real and Nominal Exchange Rate Fluctuations in Transition Economies."
by Ali M. Kutan, and Salahattin Dibooglu


This paper provides an empirical inquiry into the sources of movements of the real and nominal exchange rates in Hungary and Poland for during the 1990:01-1998:02 period. We decompose the exchange rate movements into those attributable to real and nominal shocks. Using a popular structural VAR model and assuming long run neutrality of nominal shocks, we find that (1) nominal shocks have played a significant role in Poland, but not in Hungary, in explaining real exchange rate movements during the transition period. More...

PUBLISHED: Journal of Compartive Economics as "Sources of Real Exchange Rate Fluctuations in Transition Economies: Evidence from Hungary and Poland."