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The recent admission of Slovakia into the Economic and Monetary Union (EMU) stands in sharp contrast with the considerable difficulties faced by Hungary with the fulfillment of the Maastricht criteria. This is a puzzling development for two reasons: first, during the early phase of the...
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This paper tests whether the exchange rates of the Czech koruna, the Hungarian forint, and the Polish zloty were anchored by market expectations concerning their euro locking rates. First, the process of the exchange rate is derived as a function of the following factors: (i) latent exchange...
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