Monday, January 14, 2008

Real and Nominal Convergence Go Hand in Hand

Hence, inflation in a fixed exchange rate regime in New Europe (e.g. in Slovakia after adopting euro) can be expected at levels up to real GDP per capita growth (5-7%).

1 comment:

Octavian said...

Hello there, just checking out your blog! To my knowledge, if the regime has fixed exchange rate, their monetary policy is useless yes? Do you think this has any implications for long term growth?