Research Article
BibTex RIS Cite
Year 2016, Volume: 5 Issue: 4, 360 - 364, 30.12.2016
https://doi.org/10.17261/Pressacademia.2017.358

Abstract

References

  • Adler, G. and Tovar, C. E. 2012, "Riding Global Financial Waves: The Economic Impact of Global Financial Shocks on Emerging Market Economies", IMF Working Paper WP/12/188.
  • Artis, M., and Ehrmann, M. 2006, "The exchange rate _ A shock-absorber or source of shocks? A study of four open economies", Journal of International Money and Finance 25, 874-893.
  • Blanchard, O. 2010 "Institutions, Markets, and Poland's Economic Performance", Argumenta Oeconomica Cracoviensia 6, 7-11.
  • Bailliu J, Fujii E, 2005 :"Exchange Rate Pass-Through and the Inflation Environment in Industrialized Countries " Working Paper 2004-21, ISSN 1192-5434.
  • Baltagi, B. 2009 : "Econometric Analysis of Panel Data", Fourth Edition, London: John Wiley & Sons Ltd.Bank of New Zealand, (2003), pp. 1-28
  • Borghijs, A., and Kuijs, L. 2004, "Exchange Rates in Central Europe: A Blessing or a Curse?", IMF Working Paper WP/04/2, 1-28.
  • Calvo, G., and Reinhart, M.,K., 2002, "Fear of Floting," Quarterly Journal of Economics.
  • Coricelli, F., Bostjan, J., Masten, I., 2005: "Exchange rate pass-through in EMU acceding countries: Empirical analysis and policy implication," Journal of banking anf finance, 2005.
  • Canzoneri, M. B., Vallés Liberal, J.,and Viñals, J. 1996, "Do Exchange Rates Move to Address International Macroeconomic Imbalances?," Banco de España - Servicio de Estudios, Documento de Trabajo 9626.
  • Dabrowski, M. A., and Wróblewska, J. 2014, "Financial shocks as a cause of real exchange rate fluctuations in Poland-evidence from the Bayesian structural VAR models", in: Proceedings of the 8th Professor Aleksander Zelias International Conference on Modeling and Forecasting of Socio-Economic Phenomena, Foundation of the Cracow University of Economics, Cracow, 37-46.
  • Edwards , S., 2006: "The relationships between exchange rates and inflation targeting revisited", NBER, Working Paper 12163, Cambridge, 1-33.
  • Fetai, B 2013: "Exchange rates pass-through in transition economies", Transition Studies Review, vol. 20, 309-324.
  • Funke, M., 2000: "Macroeconomic shocks in Euroland vs the UK: supply, demand or nominal?" University of Hamburg, Mimeo.
  • Ganev G, Molnar K, Rybinski K, Wozniak P 2002:" Transmission mechanisms of monetary policy in central and eastern Europe", central for social and economic research, Case Reports No. 0052, Warsaw, pp 1–28.
  • Kuijs L., 2002. "Monetary Policy Transmission Mechanisms and Inflation in the Slovak Republic". IMF Working Paper, 80.
  • Stażka-Gawrisyak, A., 2009: "The Shock-Absorbing capacity of the flexible exchange rate in Poland", Focus on Economic Integartion, 4, 5470.
  • Shevchuk 2014, Tsangarides, C. G. 2012, "Crisis and recovery: role of the exchange rate regime in emerging market countries". Journal of Macroeconomics 34, 470-488.
  • Tsangarides, C. G. 2012, "Crisis and recovery: role of the exchange rate regime in emerging market countries". Journal of Macroeconomics 34, 470-488.
  • Thomas, A., 1997: "The monetray transmission mechanism in Sweeden", IMF working paper, WP/97/176.

THE RELATIONSHIP BETWEEN EXCHANGE RATE AND INFLATION: THE CASE OF WESTERN BALKANS COUNTRIES

Year 2016, Volume: 5 Issue: 4, 360 - 364, 30.12.2016
https://doi.org/10.17261/Pressacademia.2017.358

Abstract

The paper investigates empirically the relationships between
exchange rates and inflation in Western Balkan countries. The literature on the
transition countries has recently focused on exchange rate as a shock absorber
and downplayed its costs to macroeconomic stabilization.  However, the decision to apply a different
exchange rate regime depends on the costs and benefits in giving up an exchange
rate instrument.  With this in mind, the
objective of this study is to determine whether fixed exchange rates play a
significant role in inflationary performance or whether flexible exchange rates
perform as a better shock-absorbing instrument in the Western Balkans. The
result reveals that an exchange rate is still the main source of inflationary
pressures in Western Balkan countries. Thus policy makers must weigh the
relative costs and benefits associated with introducing a flexible exchange
rate in small open economies because such regime is likely to incur more costs
than benefits. 

References

  • Adler, G. and Tovar, C. E. 2012, "Riding Global Financial Waves: The Economic Impact of Global Financial Shocks on Emerging Market Economies", IMF Working Paper WP/12/188.
  • Artis, M., and Ehrmann, M. 2006, "The exchange rate _ A shock-absorber or source of shocks? A study of four open economies", Journal of International Money and Finance 25, 874-893.
  • Blanchard, O. 2010 "Institutions, Markets, and Poland's Economic Performance", Argumenta Oeconomica Cracoviensia 6, 7-11.
  • Bailliu J, Fujii E, 2005 :"Exchange Rate Pass-Through and the Inflation Environment in Industrialized Countries " Working Paper 2004-21, ISSN 1192-5434.
  • Baltagi, B. 2009 : "Econometric Analysis of Panel Data", Fourth Edition, London: John Wiley & Sons Ltd.Bank of New Zealand, (2003), pp. 1-28
  • Borghijs, A., and Kuijs, L. 2004, "Exchange Rates in Central Europe: A Blessing or a Curse?", IMF Working Paper WP/04/2, 1-28.
  • Calvo, G., and Reinhart, M.,K., 2002, "Fear of Floting," Quarterly Journal of Economics.
  • Coricelli, F., Bostjan, J., Masten, I., 2005: "Exchange rate pass-through in EMU acceding countries: Empirical analysis and policy implication," Journal of banking anf finance, 2005.
  • Canzoneri, M. B., Vallés Liberal, J.,and Viñals, J. 1996, "Do Exchange Rates Move to Address International Macroeconomic Imbalances?," Banco de España - Servicio de Estudios, Documento de Trabajo 9626.
  • Dabrowski, M. A., and Wróblewska, J. 2014, "Financial shocks as a cause of real exchange rate fluctuations in Poland-evidence from the Bayesian structural VAR models", in: Proceedings of the 8th Professor Aleksander Zelias International Conference on Modeling and Forecasting of Socio-Economic Phenomena, Foundation of the Cracow University of Economics, Cracow, 37-46.
  • Edwards , S., 2006: "The relationships between exchange rates and inflation targeting revisited", NBER, Working Paper 12163, Cambridge, 1-33.
  • Fetai, B 2013: "Exchange rates pass-through in transition economies", Transition Studies Review, vol. 20, 309-324.
  • Funke, M., 2000: "Macroeconomic shocks in Euroland vs the UK: supply, demand or nominal?" University of Hamburg, Mimeo.
  • Ganev G, Molnar K, Rybinski K, Wozniak P 2002:" Transmission mechanisms of monetary policy in central and eastern Europe", central for social and economic research, Case Reports No. 0052, Warsaw, pp 1–28.
  • Kuijs L., 2002. "Monetary Policy Transmission Mechanisms and Inflation in the Slovak Republic". IMF Working Paper, 80.
  • Stażka-Gawrisyak, A., 2009: "The Shock-Absorbing capacity of the flexible exchange rate in Poland", Focus on Economic Integartion, 4, 5470.
  • Shevchuk 2014, Tsangarides, C. G. 2012, "Crisis and recovery: role of the exchange rate regime in emerging market countries". Journal of Macroeconomics 34, 470-488.
  • Tsangarides, C. G. 2012, "Crisis and recovery: role of the exchange rate regime in emerging market countries". Journal of Macroeconomics 34, 470-488.
  • Thomas, A., 1997: "The monetray transmission mechanism in Sweeden", IMF working paper, WP/97/176.
There are 19 citations in total.

Details

Journal Section Articles
Authors

Besnik Fetai This is me

Paul Sergius Koku This is me

Agron Caushi This is me

Ariana Fetai This is me

Publication Date December 30, 2016
Published in Issue Year 2016 Volume: 5 Issue: 4

Cite

APA Fetai, B., Koku, P. S., Caushi, A., Fetai, A. (2016). THE RELATIONSHIP BETWEEN EXCHANGE RATE AND INFLATION: THE CASE OF WESTERN BALKANS COUNTRIES. Journal of Business Economics and Finance, 5(4), 360-364. https://doi.org/10.17261/Pressacademia.2017.358

Journal of Business, Economics and Finance (JBEF) is a scientific, academic, double blind peer-reviewed, quarterly and open-access journal. The publication language is English. The journal publishes four issues a year. The issuing months are March, June, September and December. The journal aims to provide a research source for all practitioners, policy makers and researchers working in the areas of business, economics and finance. The Editor of JBEF invites all manuscripts that that cover theoretical and/or applied researches on topics related to the interest areas of the Journal. JBEF charges no submission or publication fee.



Ethics Policy - JBEF applies the standards of Committee on Publication Ethics (COPE). JBEF is committed to the academic community ensuring ethics and quality of manuscripts in publications. Plagiarism is strictly forbidden and the manuscripts found to be plagiarized will not be accepted or if published will be removed from the publication. Authors must certify that their manuscripts are their original work. Plagiarism, duplicate, data fabrication and redundant publications are forbidden. The manuscripts are subject to plagiarism check by iThenticate or similar. All manuscript submissions must provide a similarity report (up to 15% excluding quotes, bibliography, abstract, method).


Open Access - All research articles published in PressAcademia Journals are fully open access; immediately freely available to read, download and share. Articles are published under the terms of a Creative Commons license which permits use, distribution and reproduction in any medium, provided the original work is properly cited. Open access is a property of individual works, not necessarily journals or publishers. Community standards, rather than copyright law, will continue to provide the mechanism for enforcement of proper attribution and responsible use of the published work, as they do now.