Publication details

Impact of the real exchange rate on Czech trade

Authors

ŽÍDEK Libor NĚMEC Daniel

Year of publication 2012
Type Article in Proceedings
Conference Proceedings of the 30th International Conference Mathematical Methods in Economics 2012
MU Faculty or unit

Faculty of Economics and Administration

Citation
Web Conference proceedings
Field Economy
Keywords real exchange rate; foreign trade; Czech economy
Attached files
Description Since the beginning of the transformation process in 1990, the Czech crown has operated in several different exchange rate regimes. The Czech currency appreciated in real terms in all of the regimes. The cause was higher inflation in the Czech economy compared to inflation rates in the trading partners’ economies dur-ing the periods of the fixed regimes. Later on, the main cause was in nominal appre-ciation of the crown. It is surprising that in the meantime Czech exports were in-creasing enormously (in absolute terms as well as percentage of GDP). The goal of the article will be to analyse and explain the seemingly positive impact of real ex-change rate on the development of Czech foreign trade. The cointegrating (long-run) relations are estimated using Johansen's multivariate procedure. Estimates of the short-run dynamics are obtained using the error-correction techniques.

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