Transition Economies, The Exchange Rate Regime Choice And Its Influencing Factors

Theories about the choice of exchange rate regime first started in 1950s. Economists have developed different theories from different aspects and made lots of proof-tests. In 1990s, the pre-socialism camp collapsed and countries from Middle and East Europe and former Soviet Union began their transition from planned economy to market economy. Since none of them had market economic exchange rate regime under socialistic system, they were faced with the task of how to make right choices of exchange rate regime at the beginning of their economic reform. This paper makes a systematic analysis of the choice of exchange rate regimes of transitional countries by discussing different influencing factors in different phases.We select Bulgaria, Czech, Hungary, Poland, Romania, Slovak, Slovenia, Albania, Croatia, Macedonia, Estonia, Latvia, Lithuania, Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyz, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan as objects. We first discuss the theoretic base of their choices of exchange rate regimes, make a summary of their choosing processes and analyze the same and different points of their choices. Based on these, we come up with main influencing factors in initial and later stages. Then we make proof-tests of the relations between these factors and their exchange rate regimes. Finally we make conclusions of their choices of exchange rate regimes as references for China.