WTO Working Papers

WTO working papers usually represent research in progress. Such research may be conducted in the preparation of WTO Secretariat reports, studies or other material for WTO members. The papers are circulated for comment because the WTO considers critical review of professional research to be extremely important.


Exchange Rate Regimes and the Stability of Trade Policy in Transition Economies

This paper examines the interplay between exchange rate regimes and policies and commercial policy in six transition economies. In all these economies the rate of protection afforded domestic industry by the exchange rate has been eroded by high rates of inflation and insufficient growth in productivity. As a result, there has been pressure on governments to increase trade barriers and each country examined has had recourse to various means of restricting imports. We argue that more flexible management of the nominal exchange rate would be a preferable way of dealing with the real appreciation of these countries’ currencies.


Keywords: transition economies, trade policy, exchange rates
JEL: F33: International Economics / International Finance / International Monetary Arrangements and Institutions; P33: Economic Systems / Socialist Institutions and Their Transitions / Socialist Institutions and Their Transitions: International Trade, Finance, Investment, Relations, and Aid; F13: International Economics / Trade / Trade Policy; International Trade Organizations
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