Measuring convergence of the new member countries' exchange rates to the Euro

Bettina Becker, Stephen G. Hall

Research output: Contribution to journalArticlepeer-review

Abstract

Despite the fact that convergence has been a popular theme in applied economics since the seminal papers of Barro (1991)and Barro and Sala-i-Martin (1992), the very notion of convergence quickly becomes problematic from an academic viewpoint when we try and formalize a framework to think about these issues. In the light of the continuous prominence of convergence issues in the academic and policy debate and the number of different definitions of convergence used, it would be useful to have a more universal framework to think about these issues. In this paper we consider some of the standard definitions of convergence and suggest an alternative way to analyze it based on a common factor framework.
Original languageEnglish
Pages (from-to)20-25
Number of pages6
JournalJournal of Financial Transformation
Issue number19
Publication statusPublished - Apr 2007

Keywords

  • convergence
  • exchange rates
  • transition economies
  • principal components analysis

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