Revisiting the asymmetric impacts of the exchange market pressure on the inflation, interest rate and foreign trade balance in Eastern Europe

Ozcelebi O., Tokmakçıoğlu K., Su E.

EMPIRICAL ECONOMICS, vol.61, no.5, pp.2517-2538, 2021 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 61 Issue: 5
  • Publication Date: 2021
  • Doi Number: 10.1007/s00181-020-01965-6
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, IBZ Online, International Bibliography of Social Sciences, ABI/INFORM, Business Source Elite, Business Source Premier, EconLit, Geobase, Public Affairs Index
  • Page Numbers: pp.2517-2538
  • Keywords: Asymmetry, EMP, Nonlinear VAR, Qual VAR
  • Istanbul Technical University Affiliated: Yes


This study examines the relationship between the exchange market pressure (EMP) and macroeconomic and financial variables for Eastern European countries. The increase/decrease in the EMP influences the probability of a currency crisis, while this phenomenon may negatively/positively affect the foreign trade balance and may obstruct/facilitate foreign debt service in the Czech Republic and Poland due to the need for imported inputs for domestic production. We also consider that the effects of EMP can be asymmetrical and be opposed to regimes changes; furthermore, we find for the Czech Republic, Hungary, and Poland that changes in the EMP may affect the probability of a broad financial crisis.