Table of Contents

Currency and Competitiveness in Europe

Currency and Competitiveness in Europe

Edited by Klaus Liebscher, Josef Christl, Peter Mooslechner and Doris Ritzberger-Grünwald

This book combines currency matters with competitiveness considerations, with a view to raising the understanding of exchange rate dynamics and to analysing the role of exchange rates in reinforcing economic competitiveness.

Preface

Edited by Klaus Liebscher, Josef Christl, Peter Mooslechner and Doris Ritzberger-Grünwald

Subjects: economics and finance, financial economics and regulation, industrial economics, money and banking

Extract

Understanding exchange rates is not an easy task. Unforeseen movements in one direction or another have fuelled the perception in economics that exchange rate behaviour is disconnected from macroeconomic fundamentals, at least in the short and medium term. This disconnection leads to a puzzle, or rather three puzzles, regarding exchange rate levels, exchange rate volatility and purchasing power parity. Yet others reject such a perception. To abandon macro fundamentals – they claim – would be like throwing the baby out with the bath water. In their view, even a microstructure approach leaves some role for macro fundamentals. Currency and Competitiveness in Europe – the title of this book – combines two key economic concepts that have both generated a bulk of literature. Bringing those two terms together, we focus the debate on the real side of the economy. Moreover, we put a regional focus on Central, Eastern and South-Eastern Europe (CESEE), which allows us to include the aspect of transition and convergence. After all, notwithstanding the very different stages of catching up in the region, differing exchange rate regimes and different degrees of openness constitute major elements influencing the competitiveness of those countries, that is, their ability to participate successfully and sustainably on European or global markets. The book is based on the Conference on European Economic Integration 2007 of the Oesterreichische Nationalbank, which took place on 19 and 20 November in Vienna. The conference explored the links between the external value of currencies and structural developments in the real...