Formation of Exchange Rates on the Russian Market: Dynamics and Modelling

Galina Kovaleva. The Formation of the Exchange Rate on the Russian Market: Dynamics and Modelling. The Russian financial market is fast becoming one of the major sectors of the Russian economy. Assets have been increasing steadily, while new market segments and new financial market instruments have emerged. Kovaleva attempted to isolate the factors influencing exchange rates, determine patterns in the dynamic changes to the rouble/dollar exchange rate, construct models of the processes, and on the basis of these activities make forecasts. She studied the significance of economic indicators influencing the rouble/dollar exchange rate at different times, and developed multi-factor econometric models. In order to reveal the inner structure of the financial indicators and to work out ex-post forecasts for different time intervals, she carried out a series of calculations with the aim of constructing trend-cyclical (TC) and harmonic models, and Box and Jenkins models. She found that: 1. The Russian financial market is dependant on the rouble/dollar exchange rate. Its dynamics are formed under the influence of the short-term state treasury notes and government bonds markets, interbank loans, the rouble/DM exchange rate, the inflation rate, and the DM/dollar exchange rate. The exchange rate is influenced by sales on the Moscow Interbank Currency Exchange and the mechanism of those sales. 2. The TC model makes it possible to conduct an in-depth study of the structure of the processes and to make forecasts of the dynamic changes to currency indicators. 3. The Russian market is increasingly influenced by the world currency market and its prospects are of crucial interest for the world financial community.

The Role of Monetary Policy in Pursuing Economic Activity in Selected Transition Countries

The process of transition has brought an urgent need to develop many new market-oriented institutions or in some cases to reconstruct existing ones. One of the most important institutions of western-type economies is a central bank. It fulfils several "public good" functions, the most important of which are the achievement of stable price levels and assuring the financial stability of the economy. Nevertheless, even in economies with a long-standing market tradition, the question of whether a central bank is able to stimulate economic activity or whether all its cyclical actions lead only to changes in price levels remains open. The main purpose of this analysis was to empirically prove or disprove the relation between monetary policy and economic activity in more advanced transition countries. Basing his findings on commonly used econometric methods (causality tests, VAR modelling and simulations, simultaneous equations models), Delakorda concludes that the relation between money and economic activity is a mutual one, as there are significant differences between different countries in the conduct of monetary policy and in the environment of central banks. It is the latter which determines the relation between money and economic activity.

New Prosperity for Rural Regions

The project deals with problems of marginal rural regions in the period of transformation in Slovenia and the Czech Republic. The course of the transformation, its impact, related border problems and environmental aspects were studied in seven model regions of the two countries, using geographical, cartographic, sociological, historical and remote-sensing methods. The opinions of both the local populations and the local authorities were also taken into account. The most important problems observed included the deepening of marginality, the worsening situation in the labour market, structural demographic degradation of the most marginal settlements and a lack of development programmes. In the Czech Republic the state had no effective regional policy up to the time of the research. Possibilities for future prosperity include exploitation of human and other local resources, the elaboration of local and regional programmes capable of gaining financial support and the utilisation of tranquility and the positive environmental situation. It is the local people who usually represent the main wealth of marginal regions and care for them is the task of the local authorities.

The New Electoral Geography of Central Europe

Zarycki studied the political map of Central Europe today on the basis of results of recent parliamentary and/or presidential elections in the Czech Republic, Hungary, L8ithuania, Poland, Slovakia and Ukraine. He identified first the structure of regional political cleavages, then the spatial patterns emerging in different countries. He also considered the significance and eventual regional differentiation of various possible influences on these patterns, including urbanisation, historical heritage, ethnic factors, population movements, economic differentiation, the effects of the transformation, demographic factors, education and religion. Virtually all the countries showed a cleavage between more traditional, anti (or non-) communist regions and secular areas with higher post-communist support. Except in Ukraine and the Czech Republic, the post-communist party is dominated by the direct heirs of the former communist parties transformed into moderate left parties. The second major class of cleavages was typical of the Visegrad countries, i.e. the conflict between liberal, mostly metropolitan, regions and a different periphery, usually with a strong populist or anti-liberal appeal. This usually depends on the existence of a sizeable well-educated class, usually pro-market and pro-Western, and on the resolution of the conflict between post and anti-Communists. The third type of cleavage is based on ethnic factors and is clearest in Lithuania and Slovakia, where there are large ethnic minorities. Of factors influencing political behaviour, the two major ones identified were the historical heritage and urbanisation.