Auf ihrem Weg in Richtung Euro werden die vier großen neuen mittel- und osteuropäischen EU-Mitglieder (MOL-4) – Polen, Ungarn, Slowakei und die Tschechische Republik – laut einer Analyse von Deutsche Bank Research bald auf der Zielgeraden ankommen. Trotz der wachsenden Bedeutung möglicher Paritäten zwischen zloty, forint und koruna, besteht auch weiterhin Ungewissheit darüber, wie über- oder unterbewertet die Währungen der MOL-4 eigentlich sind.
Our paper presents an exchange-rate model that examines the competitiveness of these economies in the EU’s single market on the basis of euro wage levels in manufacturing.
We initially estimate the correlation between productivity and the euro wage level for the EU-15 countries. In a second step we enter the CEE-4 data in the equation and calculate the equilibrium wage level. In doing so, we arrive at the euro wage level these countries could afford in light of their factor endowment if they wish to remain competitive in the single market.
Our estimates suggest continuous undervaluation of the CEE-4 currencies. Even though the productivity gap between the EU-15 and the new members is large, it is apparently not as large as implied by the current exchange rates. Poland, Slovakia and the Czech Republic exhibit in this sense an undervalued real exchange rate versus the euro. Only the Hungarian forint has reached its equilibrium level over the last few years in the course of substantial wage increases.
Our main finding of a real undervaluation is compatible with the CEE-4’s ongoing attractiveness for foreign investors. The competitive positions of Poland, Hungary, Slovakia and the Czech Republic in the single market remain strong at the current real exchange rate levels.
To read the paper in full, visit the Deutsche Bank Research website.