Cover IMF Working Papers
Maintaining Competitiveness Under Equilibrium Real Appreciation: The Case of Slovakia
Author: Nienke Oomes
Series:
IMF Working Papers
Volume/Issue:
Volume 2005: Issue 065
Language:
English
Publication Date:
01 Mar 2005
DOI:
https://doi.org/10.5089/9781451860849.001
ISBN:
9781451860849
ISSN:
1018-5941
Pages:
29
Keywords:
WP; appreciation; productivity growth; Slovakia
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper evaluates competitiveness in Slovakia and estimates the equilibrium real exchange rate for the koruna. Slovak wages and prices are found to have been relatively low even when adjusted for differences in relative income and productivity, suggesting an undervalued real exchange rate. However, recent rapid nominal appreciation has reduced most or all of this undervaluation and has brought the real exchange rate near or above equilibrium. The productivity-driven equilibrium real appreciation rate during 2005?09 is estimated at close to 3 percent per year but can be lower with the help of fiscal consolidation.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund