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On the evolution of competitiveness in Central and Eastern Europe: is it broken?

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  • Juan Carlos Cuestas
Abstract
In this paper we aim to analyse the evolution of the real exchange rate (RER) as a measure of competitiveness for a group of Central and Eastern European countries. To do so, we apply unit root tests with breaks and estimate equations with structural breaks. The results show that even though RERs have become flatter, which means less competitiveness is lost against main trading partners, they have become less mean reverting, meaning that shocks now tend to have longer effects. Policy conclusions are derived from this analysis

Suggested Citation

  • Juan Carlos Cuestas, 2019. "On the evolution of competitiveness in Central and Eastern Europe: is it broken?," Bank of Estonia Working Papers wp2019-07, Bank of Estonia, revised 29 Oct 2019.
    • Handle: RePEc:eea:boewps:wp2019-07
    DOI: 0.23656/25045520/072019/0169
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    Cited by:

    1. Juan Carlos Cuestas, 2019. "Quantile regressions, asymmetric adjustment and crisis: the case of EU real exchange rates," Working Papers 2019/09, Economics Department, Universitat Jaume I, Castellón (Spain).

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    More about this item

    Keywords

    real exchange rates; Central and Eastern Europe; structural breaks; European integration;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F15 - International Economics - - Trade - - - Economic Integration

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