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Floating Exchange Rate Arrangements and
EMU Membership in Pre-Accession Economies


The recent years saw a shift in pre-accession economies towards more flexible exchange rate arrangements following recent currency crises in emerging economies and problems with earlier adopted exchange rate regimes.

The project describes the first experiences with the operation of free and managed floating regimes and the main challenges these regimes face prior to EMU-accession. The program will assess the relevance of the major fears concerning the use of flexible arrangements, the links between the exchange rate regime and macroeconomic variables (inflation, capital flows, real and nominal exchange rates, etc.) and the changes in monetary and fiscal policies in pre-accession economies.

Besides analysing the recent lessons the research program focuses on future challenges for flexible arrangements, represented by increasing capital flows, convergence play, conflicts between real and nominal convergence prior EMU membership. The program assesses how flexible regimes contribute to EMU accession and how they perform compared with other arrangements.

The program includes 2 country studies on Poland and Hungary, and a comparative paper which brings in other economies and makes some region specific conclusions on the operation of floating regimes and challenges faced by them prior EMU membership.


For further information on the project please contact office@icegec.hu