Monetary and Exchange Rate Regimes Changes: The Cases of Poland, Czech Republic, Slovakia and Republic of Serbia

  • Kosta Josifidis University of Novi Sad, Faculty of Economics in Subotica, Department of European Economics and Business, Novi Sad, Serbia
  • Jean-Pierre Allegret University of Lyon, Lyon, France; CNRS, UMR 5824, GATE, Ecully, France; ENS LSH, Lyon, France; Centre Leon Berard, Lyon, France
  • Emilija Beker Pucar University of Novi Sad, Faculty of Economics in Subotica, Department of European Economics and Business, Novi Sad, Serbia

Abstract

The paper explores (former) transition economies, Poland, Czech Republic, Slovakia and the Republic of Serbia, concerning abandonment of the exchange rate targeting and fixed exchange rate regimes and movement toward explicit/implicit inflation targeting and flexible exchange rate regimes. The paper identifies different subperiods concerning crucial monetary and exchange rate regimes, and tracks the changes of specific monetary transmission channels i.e exchange rate channel, interest rate channel, indirect and direct influences to the exchange rate, with variance decomposition of VAR/VEC model. The empirical results indicate that Polish monetary strategy toward higher monetary and exchange rate flexibility has been performed smoothly, gradually and planned, compared to the Slovak and, especially, Czech case. The comparison of three former transition economies with the Serbian case indicate strong and persistent exchange rate pass-through, low interest rate pass-through, significant indirect and direct influence to the exchange rate as potential obstacles for successful inflation targeting in the Republic of Serbia.


Key words: Exchange rate targeting, Inflation targeting, Intermediate exchange rate regimes, Monetary transmission channels.
JEL: E42, E52, F41.

How to Cite
Josifidis K., Allegret J., & Beker Pucar E. (2009). Monetary and Exchange Rate Regimes Changes: The Cases of Poland, Czech Republic, Slovakia and Republic of Serbia. Panoeconomicus, 56(2), 199-226. doi:10.2298/PAN0902199J
Section
Original scientific paper