In this paper, we estimate fundamental bilateral real exchange rates for a group of eight accession countries using a panel-cointegration approach for the period 1993-2003. We document a significant positive link between productivity levels and the corresponding real exchange rate levels. Future...

The purpose of this comment is to demonstrate that their theoretical result concerning the first order derivative of relative inflation persistence with respect to the degree of accommodation is incorrect. As a consequence, the sign of the first derivative becomes ambiguous. We provide an...