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EU Enlargement and its Macroeconomic Effects in Eastern Europe pp 116–150Cite as

Palgrave Macmillan

Capital Inflows and Convertibility in the Transforming Economies of Central Europe

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Part of the Studies in Economic Transition book series (SET)

Abstract

Central European transforming economies have all experienced considerable capital inflows once their initial inflation shock expired and their national income started to grow. These capital inflows are induced by both domestic and external economy conditions. The economic reforms in these countries have increased demand for money and have improved productivity. These improvements in domestic economy conditions have invited capital inflows from abroad. In addition, international interest rates have been falling since 1994, which promoted capital allocations in Central European countries still perceived as emerging market economies by international capital investors.

Keywords

  • Exchange Rate
  • Interest Rate
  • Monetary Policy
  • Central Bank
  • Domestic Currency

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Professor of Economics, Sacred Heart University, 5151 Park Avenue, Fairfield, CT 06432. USA. Fax +1 203 230 9860; E-mail: Orlowski@sacredheart.edu; Paper to the conference Opening up for Foreign Capital — Risks and Benefits for Transition Economies at the Kiel Institute of World Economics, Kiel, Germany, 30–31 May 1997. This version: June 1997. The author wishes to acknowledge support from the Institut für Wirtschaftsforschung in Halle, Germany, and is grateful to Hubert Gabrisch and Thomas Linne who have provided valuable comments. The author remains solely responsible for the content.

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Authors
  1. Lucjan T. Orlowski
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Editor information

Editors and Affiliations

  1. Institute for Economic Research Halle, Germany

    Hubert Gabrisch (Head of Division) & Rüdiger Pohl (President) (Head of Division) &  (President)

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© 1999 Palgrave Macmillan, a division of Macmillan Publishers Limited

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Orlowski, L.T. (1999). Capital Inflows and Convertibility in the Transforming Economies of Central Europe. In: Gabrisch, H., Pohl, R. (eds) EU Enlargement and its Macroeconomic Effects in Eastern Europe. Studies in Economic Transition. Palgrave Macmillan, London. https://doi.org/10.1057/9780230502475_5

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