“Global Value Chains and Equilibrium Exchange Rate: Evidence from Central European Economies” - Warsaw Economic Seminars [20.04.2023]
We kindly invite you to take part in the next meeting within the Warsaw Economic Seminars series, organised jointly by the Faculty of Economic Sciences, University of Warsaw and the Warsaw School of Economics.
During the meeting Kamila Kuziemska-Pawlak, Ph.D. (Narodowy Bank Polski, University of Łódź) will present the research “Global Value Chains and Equilibrium Exchange Rate: Evidence from Central European Economies”.
The seminar will take place on April 20th 2023 at 5 p.m. in hybrid mode: in room A203 at the Faculty of Economic Sciences (Długa 44/50) and via Zoom platform: https://uw-edu-pl.zoom.us/j/94952861067?pwd=eWFxK0N3SWJJdUNtZUQ4RDYxQ1loZz09
Meeting ID: 949 5286 1067
Passcode: 149259
Abstract:
This paper proposes an extension of the fundamental equilibrium exchange rate (FEER) model that accounts for the trade linkages within the Global Value Chains (GVCs). In the modified FEER framework, both backward and forward linkages are taken into consideration. To demonstrate the empirical relevance of the complex nature of existing trade linkages, the proposed FEER model is applied to analyze exchange rate fluctuations of the selected Central and Eastern European countries against the euro. It is documented that in Czechia, Hungary, and Poland the standard FEER framework predicts rapid appreciation of the equilibrium exchange rate after 2010, which implies deepening undervaluation of the actual real exchange rate towards the end of the analysed period. Instead, when the GVCs’ linkages are taken into account in the framework, actual real exchange rates are broadly in line with the fundamental equilibrium exchange rates, and hence the missing real appreciation of the Czech krone, the Hungarian forint and the Polish zloty is to a large extent an equilibrium phenomenon.
The calendar of all seminars within the Warsaw Economic Seminars series is available on the website: https://sites.google.com/site/warsaweconseminars/calendar
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The aim of the Warsaw Economic Seminars series is to create a platform for researchers and specialists from all over the world to present their research and share knowledge on economics and economic policy.
The participants can both listen to presentations and take part in discussions and present their own research to get feedback from other researchers and students.
