October 29, 2003 Világi Balázs presents a paper in Hungarian language: The Optimal Euro Conversion Rate in a Stochastic Dynamic General Equilibrium Model

Abstract

October 29, 2003

Világi Balázs (BKÁE)

The Optimal Euro Conversion Rate in a Stochastic Dynamic General Equilibrium Model

In this paper we consider how a small open EMU accession country should choose its Euro conversion rate. We study the problem by a stochastic dynamic general equilibrium model. We interpret the Monetary Union as a perfectly credible infinite nominal exchange rate peg, and given the vector of initial conditions and exogenous factors we compare the paths of the endogenous variables induced by different levels of the fixed exchange rate. Finally we provide a welfare ranking of these paths by a social utility function derived from the model.

Vissza a tetejére

The primary objective of the MNB shall be to achieve and maintain price stability. (...) Without prejudice to its primary objective, the MNB shall support the maintenance of the stability of the system of financial intermediation, the enhancement of its resilience, its sustainable contribution to economic growth; furthermore, the MNB shall support the government’s economic policy and its policy related to environmental sustainability, using instruments at its disposal.