The author would like to thank the editor of the journal Dr George Bratsiotis, Dr Nikolaos Giannellis and an anonymous referee for their constructive suggestions and helpful comments that improved the quality of the paper. Of course, the usual caveat applies.
CAPITAL-ENHANCED EQUILIBRIUM EXCHANGE RATE IN THE PRESENCE OF STRUCTURAL BREAKS: EVIDENCE FROM THE VISEGRAD COUNTRIES*
Article first published online: 26 FEB 2012
© 2012 The Author. The Manchester School © 2012 Blackwell Publishing Ltd and The University of Manchester
The Manchester School
Volume 81, Issue 1, pages 58–79, January 2013
How to Cite
KOUKOURITAKIS, M. (2013), CAPITAL-ENHANCED EQUILIBRIUM EXCHANGE RATE IN THE PRESENCE OF STRUCTURAL BREAKS: EVIDENCE FROM THE VISEGRAD COUNTRIES. The Manchester School, 81: 58–79. doi: 10.1111/j.1467-9957.2011.02258.x
Manuscript received 10.8.09; final version received 31.1.11.
- Issue published online: 10 DEC 2012
- Article first published online: 26 FEB 2012
In this paper I test the validity of the capital-enhanced equilibrium exchange rate (CHEER) approach for the four Visegrad new EU countries. Recent unit root and cointegration techniques with structural breaks in the data have been used. The CHEER approach is empirically validated only for the Czech Republic, while for Poland and Slovakia there is evidence of plausible economic relationships between the nominal exchange rate and each of the price and interest rate differentials. In contrast, such a relationship cannot be identified for Hungary.