EconStor >
Verein für Socialpolitik >
Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/37234
  
Title:Transmission Channels and Real Economy Effects of the Current Global Crisis on the Economies of Central East Europe PDF Logo
Authors:Stephan, Johannes
Brezinski, Horst
Issue Date:2010
Series/Report no.:Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Monetary Policy Under Uncertainty C16-V3
Abstract:This contribution analyses the real economy effects of the current global crisis in Central East Europe. It focuses on the transmission channels of a drying up of capital inflows, in particular on foreign direct investment inflows and on foreign currency borrowing, the current account, and the exchange rate regime. The analysis shows that the adverse real economy effects of the externally-driven capital inflow setback could be mitigated by a reduction of current account deficits, even though the latter depends on the flexibility of the exchange rate regime. Therefore, the countries with a fixed exchange rate to the Euro proved to be the countries in the region hit hardest. Next to these commonalities, the contribution also makes the case that in some cases, unsound national policies generated vulnerabilities that the crisis unveiled as non-sustainable and aggravated the real economy effects of this global crisis. Estonia’s construction and housing sectors are used here as a case in point. This contribution hence provides its own insights into the role of the exchange rate regime in the face of recurring financial crisis and in the run-up to Euro adoption, and argues that whilst there is very limited room for own national policies due to the external-biased growth and development strategy of the region, those were often unsound and aggravated the adverse effects of the global crisis on Central East Europe.
Subjects:Central East Europe
Estonia
Financial Crisis
Contagion
Real Estate
Housing
JEL:E40
O20
P27
Document Type:Conference Paper
Appears in Collections:Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie

Files in This Item:
File Description SizeFormat
VfS_2010_pid_899.pdf485.88 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/37234

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.