No abstract

No abstract

No abstract

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²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² WHQ FHQWUDO HDVWHUQ (XURSHDQ FRXQWULHV SOXV &\SUXV DQG 0DOWD ²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¶JURZWK DQG VWDELOLW\· SDFW 7KHUH LV QR GHURJDWLRQ RU RSWRXW FODXVH DV LQ WKH FDVH RI *UHDW %ULWDLQ RU 'HQPDUN WKH RQO\ ZD\ WR VWD\ RXW LV WKH SHUVLVWHQW IDLOXUH WR VDWLVI\ DW OHDVW RQH RI WKH 0DDVWULFKW FRQGLWLRQV IRU (08 PHPEHUVKLS WKRXJK QRW ² OLNH 6ZHGHQ ²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

Central and Eastern European economies have made extraordinary progress in their trade and exchange regimes. Surprisingly, instant convertibility was established for a great variety of exchange rate regimes. In spite of diversity, all these countries have followed a common pattern: severe initial undervaluation -the cost of speed and unrestricted trade -followed by rapid real revaluation and incipient protectionism. Since 1994 in many cases an ernburrus de richesse has appeared: high capital inflows which are either inflationary or costly to sterilize. A major cause of these flows -or at any rate of the high cost of sterilization -is the presence of significant interest rate differentials higher than required to cover the risk of devaluation. These are the necessary consequence of a policy of positive real interest rates and of real revaluation from excessively undervalued exchange rates. Lower interest rates are recommended, both to stem financial capital inflows and to reduce the cost of their sterilization. JEL classification: F3 I , 0 I 1