Voluminous theoretical and empirical research shows that real exchange rate (RER) undervaluation could be conducive to economic development. Why do countries then often avoid the pursuit of policies that facilitate undervaluation or even intentionally pursue RER overvaluation? We address this...

This paper studies the role of the exchange rate regime for trade of new products. It first provides VAR evidence that a rise in external productivity shifts trade away from new products and more so in fixed regimes. Then, it presents a model with firm dynamics in line with this evidence. We...

In August 1998 the Russian foreign exchange market and financial system collapsed. As a consequence the rouble devaluated in real terms against the currencies of the main trade partners, generating an output push in the agri-food sector. This improved the financial health of most producer, thus...

Der vorliegende Diskussionsbeitrag entstand im Rahmen eines Forschungsprojektes über die monetäre Integration von fünf mittel- und osteuropäischen EU-Beitrittskandidaten (Polen, Tschechische Republik, Ungarn, Slowenien und Estland). Das hier vorgestellte Kapitel geht auf die...