EXCHANGE RATE VOLATILITY AND GROWTH IN EMERGING EUROPE

This paper analyses the influence of NEER and REER volatility on growth ina panel of six developing European countries. Two measures of volatility are employed(standard deviation and ARCH/GARCH models) and its influence on growth is tested boththrough a GLS and a GMM estimation. Moreover, given the properties of the time seriesused, both panel and individual cointegration are tested using the Pedroni and, respectively,the Johansen methodology.