<abstract xmlns="http://www.w3.org/1999/xhtml">
				
				<p> One of the key goals of the economic policy makers of every country is to achieve internal and external balance. An unavoidable segment of the analysis concerning the achievement of internal and external balance is certainly the influence of the exchange rate regime applied in a country. European transition countries, despite their similar initial problems and final objectives, applied different exchange rate regimes adapted to the economic circumstances and needs of the country. The paper aims to examine and demonstrate the impact of the applied exchange rate regime on the internal balance of the transition countries. The research encompasses 10 representative transition countries, in the period from 2000-2014. The results of the research, from the aspect of internal balance, confirmed the justification of the application of the floating exchange rate regime in more developed, but not in less-developed, European transition countries. The application of floating exchange rate regimes in less-developed transition countries is associated with a considerably higher average inflation rate, which may be explained by the higher import dependence of lessdeveloped countries and by the consequent transfer of depreciation to price growth.</p>
			</abstract>

One of the key goals of the economic policy makers of every country is to achieve internal and external balance. An unavoidable segment of the analysis concerning the achievement of internal and external balance is certainly the influence of the exchange rate regime applied in a country. European transition countries, despite their similar initial problems and final objectives, applied different exchange rate regimes adapted to the economic circumstances and needs of the country. The paper aims to examine and demonstrate the impact of the applied exchange rate regime on the internal balance of the transition countries. The research encompasses 10 representative transition countries, in the period from 2000-2014. The results of the research, from the aspect of internal balance, confirmed the justification of the application of the floating exchange rate regime in more developed, but not in less-developed, European transition countries. The application of floating exchange rate regimes in less-developed transition countries is associated with a considerably higher average inflation rate, which may be explained by the higher import dependence of lessdeveloped countries and by the consequent transfer of depreciation to price growth.

The Impact of the Applied Exchange Rate Regimes on the Internal Balance of Transition Countries

ECONOMICS

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

One of the key goals of the economic policy makers of every country is to achieve internal and external balance. An unavoidable segment of the analysis...

The Impact of the Applied Exchange Rate Regimes on the Internal Balance of Transition Countries

Published Online: Dec 29, 2017

Page range: 55 - 68

Received: Aug 07, 2017

Accepted: Aug 28, 2017

DOI: https://doi.org/10.1515/eoik-2017-0018

Keywords
transition countries, exchange rate regimes, economic growth, unemployment, inflation

© 2018

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

The Impact of the Applied Exchange Rate Regimes on the Internal Balance of Transition Countries

Published Online: Dec 29, 2017

Page range: 55 - 68

Received: Aug 07, 2017

Accepted: Aug 28, 2017

DOI: https://doi.org/10.1515/eoik-2017-0018

Keywordstransition countries, exchange rate regimes, economic growth, unemployment, inflation

© 2018

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
transition countries, exchange rate regimes, economic growth, unemployment, inflation