TY  - RPRT
        AU  - Belke, Ansgar H.
AU  - Setzer, Ralph
        TI  - Exchange Rate Volatility and Employment Growth: Empirical Evidence from the CEE Economies
        PY  - 2004/Mar/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1038
        UR  - https://www.iza.org/publications/dp1038
        AB  - According to the traditional 'optimum currency area' approach, not much will be lost from a
very hard peg to a currency union if there has been little reason for variations in the
exchange rate. This paper takes a different approach and highlights the fact that high
exchange rate volatility may as well signal high costs for labor markets. The impact of
exchange rate volatility on labor markets in the CEECs is analyzed, finding that volatility visà-
vis the euro significantly lowers employment growth. Hence, the elimination of exchange
rate volatility could be considered as a substitute for a removal of employment protection
legislation.
        KW  - exchange rate variability
KW  - euroization
KW  - currency union
KW  - Central and Eastern Europe
KW  - job creation
        ER  -