In this essay I've demonstrated that there is evidence of unstable and non-linear relationship between fundamental variables and exchange rates. I have tried to "tune" Frankel's (1979) real interest differential model of exchange rate fluctuation. I have distinguished between Czech crown/Euro...

The paper analyses a relationship between monetary aggregate M2 and inflation in a small open economy. The relationship between monetary expansion and inflation as well as a dynamic of income velocity of money framework in a small open economy are discussed in more details in the paper. Authors...

The article aims at introducing new methodology for recognizing suitable indicators to monitor the potential risk of extensive pressure on the exchange rate (early warning indicators) and for identifying vulnerabilities in an economy to this pressure reflected by simultaneous negative...

A number of authors have used the concept of an optimum currency area (or OCA) index to assess the relative proximity of various pairs of economies to the ideal of an optimum currency area. Alas, a significant deficiency of this approach as used so far is that it provides no room for long-term...

This paper wants to give a basic overview of arguments for and against of using the financial derivatives tools in the field of foreign exchange risk management. The case study shows, how the separate hedging instruments have impact on P & L statement. This paper discusses different relationship...

The paper discusses the phenomenon of long-term real equilibrium appreciation of the koruna in the context of economic, i.e. nominal and real convergence. The real appreciation can take place either through a nominal exchange rate channel or through inflation differential channel vis-á-vis the...