Real Exchange Rates in Transition Countries

This paper discusses the ways in which real exchange rate changes have affected macroeconomic and structural developments in transition economies. More specifically, it deals with four issues: it analyzes the real exchange rate dynamics in transition economies; it provides a comparative evaluation of the exchange rate regimes adopted by transition countries; it focuses on the link between exchange rate movements and financial crises; and it discusses the applicability of the Balassa–Samuelson hypothesis to transition economies.