Exchange Rate Policy and Economic Growth after the Financial Crisis in Central and Eastern Europe

This paper was published in: Eurasian Geography and Economics, Volume 52, Number 3 / May-June 2011, p. 390-408.

Abstract

In a paper on the effects of the global financial crisis in Central and Eastern Europe (CEE), the author reacts to a paper of Åslund (2011) published in the same issue of Eurasian Geography and Economics on the influence of exchange rate policies on the region’s recovery. The author argues that post-crisis corrections in current account deficits in CEE countries do not in themselves signal a return to steady economic growth. Disagreeing with Åslund over the role of loose monetary policy in fostering the region’s economic problems, he outlines a number of competitiveness problems that remain to be addressed in the 10 new EU member states of CEE, along with improvements in framework conditions supporting future macroeconomic growth.