Inflation Uncertainty, Output Growth Uncertainty and Macroeconomic Performance Comparing Alternative Exchange Rate Regimes in Eastern Europe

10 Pages Posted: 31 Mar 2013

See all articles by Muhammad Khan

Muhammad Khan

University of Orleans - Laboratoire d'économie d'Orléans

Mazen Kebewar

Université d’Orléans - Laboratoire d’Économie d’Orléans (LEO)

Nikolay Nenovsky

Bulgarian National Bank

Date Written: March 25, 2013

Abstract

In the late 90's, after severe financial and economic crisis, accompanied by inflation and exchange rate instability, Eastern Europe emerged into two groups of countries with radically contrasting monetary regimes (Currency Boards and Inflation targeting). The task of our study is to compare econometrically the performance of these two regimes in terms of the relationship between inflation, output growth, nominal and real uncertainties from 2000 till now. In other words, we test the hypothesis of non-neutrality of monetary and exchange rate regimes with respect to these connections. In a whole, the empirical results do not allow us to judge which monetary regime is more appropriate and reasonable to assume. EU enlargement is one of the possible explanations for the numbing of the differences and the lack of coherence between the two regimes in terms of inflation, growth and their uncertainties

Keywords: Inflation, inflation uncertainty, real uncertainty, monetary regimes, Eastern Europe

JEL Classification: C22, C51, C52, E0

Suggested Citation

Khan, Muhammad and Kebewar, Mazen and Nenovsky, Nikolay, Inflation Uncertainty, Output Growth Uncertainty and Macroeconomic Performance Comparing Alternative Exchange Rate Regimes in Eastern Europe (March 25, 2013). Available at SSRN: https://ssrn.com/abstract=2239135 or http://dx.doi.org/10.2139/ssrn.2239135

Muhammad Khan (Contact Author)

University of Orleans - Laboratoire d'économie d'Orléans ( email )

Rue de Blois BP6739
Rue de Blois
Orléans cedex 2, Centre 45067
France

Mazen Kebewar

Université d’Orléans - Laboratoire d’Économie d’Orléans (LEO) ( email )

Rue de Blois - BP: 26739, 45067 Orléans Cedex 2
Orléans, 45100
France

HOME PAGE: http://www.univ-orleans.fr/leo/index.php

Nikolay Nenovsky

Bulgarian National Bank ( email )

str "St. Sofia" 5
Sofia, 1040
Bulgaria
+ 359 2 9145 1239 (Phone)
+ 359 2 980 24 25 (Fax)

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