Exchange Rate Economics in Transition Economies

The goal of this paper is to empirically and theoretically analyze real exchange rate movements in transition countries. Since the beginning of the transition process, continuous real exchange rate appreciation has become stylized fact of all transitional economies. Most of the mainstream models of exchange rate economics have proven to be inadequate in explaining the real exchange rate movements in transition economies. Therefore, new, transition specific theories emerged as possible explanations. This paper seeks to investigate and empirically validate all transition specific theoretical frameworks which were used in explaining real exchange rate movements since the beginning of the transition