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Fiscal imbalances and exchange rate management: Greece on the track of EMU

Journal of Economics and Business - SPOUDAI

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Title Fiscal imbalances and exchange rate management: Greece on the track of EMU
Fiscal imbalances and exchange rate management: Greece on the track of EMU
 
Creator Δημόπουλος, Γ. Δ.
Φρατζέσκος, Ε. Κ.
Καπόπουλος, Παναγιώτης
 
Subject Τιμή συναλλάγματος; Φορολογική πολιτική; Οικονομική επιστήμη
Exchange rate; Fiscal policy; Economics; Macroeconomics
 
Description Measured against PPP. the drachma effective exchange rate was overvalued by a significant amount,
implying that the devaluation on March 1998 was an adjustment of the exchange rate towards the
long-run price differentials. The paper also analyses the links between fiscal policy, interest rates and the
real exchange rate in Greece and attempts to empirically measure the forces that push the exchange rate
toward real appreciation. The results suggest that positive shocks to government spending lead to an
appreciation of the temporary component of the real exchange rate. Empirical findings imply that fiscal
adjustment is very important to establishing exchange rate stability.
 
Publisher University of Piraeus
 
Date 1998-01-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
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Format application/pdf
 
Identifier http://spoudai.unipi.gr/index.php/spoudai/article/view/1089
 
Source SPOUDAI - Journal of Economics and Business; Vol 48, No 1-4 (1998); 3-20
2241-424X
1105-8919
 
Language eng
 
Relation http://spoudai.unipi.gr/index.php/spoudai/article/view/1089/1168
 
Rights Copyright (c) 1998 SPOUDAI - Journal of Economics and Business