Policy insights

Policy Insights

Policy Insight 20: Structural Inflation and Real Exchange Rate Appreciation in Visegrad-4 Countries: Balassa-Samuelson or Something Else?

The authors of Policy Insight 20 summarize the arguments for a weak Balassa-Samuelson effect and suggest that the strong real exchange rate appreciation in Visegrad-4 countries is likely not a sign of cyclical overheating, but a structural phenomenon of a different kind not predicted by conventional economic convergence theory.

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Égert, B and J Podpiera (2008), Policy Insight 20: Structural Inflation and Real Exchange Rate Appreciation in Visegrad-4 Countries: Balassa-Samuelson or Something Else? , CEPR Policy Insight No 20, CEPR Press, Paris & London. https://cepr.org/publications/policy-insight-20-structural-inflation-and-real-exchange-rate-appreciation-visegrad-4