Quantifying the Effects of the CNB's Exchange Rate Commitment: A Synthetic Control Method Approach
Journal Title: Finance a uver - Year 2017, Vol 67, Issue 6
Abstract
In this paper I evaluate the quantitative effects of the Czech National Bank’s commitment to keep the Koruna from appreciating that were put in place in 2013. I focus on the policy’s impact on output, unemployment, and inflation. I use the synthetic control method, which allows me to compute the counter-factual development of the Czech economy in the absence of the commitment. I find that the commitment helped decrease unemployment substantially. The effect on overall output is also strongly positive, almost 2 percentage points for growth in 2015, but only marginally statistically significant, which might be connected to disturbances created by changes in excise taxes. The effect of the commitment on inflation is positive but not statistically significant at standard levels.
Authors and Affiliations
Matej Opatrny
Keywords
Related Articles
- EP ID EP297033
- DOI -
- Views 146
- Downloads 0
Does Hysteresis Exist in Unemployment? New Findings from Fourteen Regions of the Czech Republic
The present study chose 14 regions of the Czech Republic as case studies to examine the existence of unemployment hysteresis. To carry out the empirical analysis, it used the SURADF test and the FADF test. The empirical...
From Financial Integration to Sudden Stops? New Evidence from EU Transition Countries
This paper examines the temporal dynamics of the relationship between real and financial determinants of capital inflows and attempts to explain the background of the recent great sudden stop episode in EU transition cou...
IPO Cycles in Central and Eastern Europe: What Factors Drive these Cycles?
In this paper we provide new evidence on the incentives for initial public offerings (IPOs) in the emerging capital markets of Central and Eastern Europe (CEE) in the 2000s. First, we prove the existence of IPO cycles. S...
Individual, Systematic and Systemic Risks in the Danish Banking Sector
This article discusses the relationship between micro-prudential variables and bank risk. For this purpose, we collect panel data on 21 Danish banks accounting for 88% of total market share in Denmark from 2000 to 2015 a...
Successful Crowdfunding Campaigns: The Role of Project Specifics, Competition and Founders’ Experience
We focus on reward-based crowdfunding and identify the basic determinants of successful crowdfunding campaigns including new determinants not analyzed in previous studies. Using a rich database of Kickstarter projects la...