Macroeconomic Conditions and Import Surcharges in Selected Transition Economies
May 1, 1999
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Summary
Analysis on macroeconomic determinants of protection in the Czech and Slovak Republics, Hungary, and Poland, while subject to many caveats, suggests that appreciation of the real exchange rate was the main macroeconomic determinant of trade policy reversals in the 1990s. This suggests that balance of payments difficulties may have been used as an excuse for protection. The analysis also suggests that greater exchange rate flexibility and tighter fiscal policies could have been used instead of import surcharges to deal with external imbalances. The surcharges may only have aggravated the external balance by slowing down exports and restructuring of production.
Subject: Financial services, Fiscal policy, Foreign exchange, Imports, International trade, Real exchange rates, Real interest rates, Trade policy
Keywords: exchange rate, exchange rate appreciation, exchange rates, import surcharge, Imports, monetary policy, policy mix, Real exchange rates, Real interest rates, Trade liberalization, Trade policy, trade policy reversal, trade policy stance, WP
Pages:
23
Volume:
1999
DOI:
Issue:
062
Series:
Working Paper No. 1999/062
Stock No:
WPIEA0621999
ISBN:
9781451848274
ISSN:
1018-5941
