PAVLOS KARADELOGLOU is Head of the Global Economy Section in the European Central Bank. He has worked at INSEE (France), at the National Technical University of Athens, Centre of Planning and Economic Research, and at the Bank of Greece. He was also Consultant at the European Commission for two years. VIRGINIE TERRAZA is Assistant Professor at the University of Luxembourg and researcher at the CREFI-LSF. Her main research concerns econometrics methods in fields of financial risk modelling and portfolio management. Presently, her work is concerned with fund investment risks and performan

• Introduction PART I: THE PURCHASING POWER PARITY AND ITS IMPLICATIONS ON EQUILIBRIUM EXCHANGE RATES Three Exchange Rate Puzzles: Fact or Fiction?; R.MacDonald The Real Exchange Rate Misalignment of the Five Central European Countries Single Equation Approach; J.Frait, L.Komárek & M.Melecký Real Equilibrium Exchange Rate in China: Is the Renminbi Undervalued?; V.Coudert & C.Couharde PART II: EXCHANGE RATES DYNAMICS AND PASS-THROUGH EFFECTS Exchange Rate Pass-Through Effect and Monetary Policy in Russia; V.V.Dobrynskaya & D.V.Levando Disaggregated Econometric Models to Forecast Inflation in Hungary; V.Várpalotai PART III: EXCHANGE RATES DYNAMICS AND STRUCTURAL SHOCKS ON ECONOMIES An Open Economy DSGE Model Linking the Euro Area and the US Economy; G.de Walque & R.Wouters Liberalization Shocks and Real Exchange Rate Appreciation in the Transition Economies; C.Papazoglou

PAVLOS KARADELOGLOU is Head of the Global Economy Section in the European Central Bank. He has worked at INSEE (France), at the National Technical University of Athens, Centre of Planning and Economic Research, and at the Bank of Greece. He was also Consultant at the European Commission for two years. VIRGINIE TERRAZA is Assistant Professor at the University of Luxembourg and researcher at the CREFI-LSF. Her main research concerns econometrics methods in fields of financial risk modelling and portfolio management. Presently, her work is concerned with fund investment risks and performan

• Introduction PART I: THE PURCHASING POWER PARITY AND ITS IMPLICATIONS ON EQUILIBRIUM EXCHANGE RATES Three Exchange Rate Puzzles: Fact or Fiction?; R.MacDonald The Real Exchange Rate Misalignment of the Five Central European Countries Single Equation Approach; J.Frait, L.Komárek & M.Melecký Real Equilibrium Exchange Rate in China: Is the Renminbi Undervalued?; V.Coudert & C.Couharde PART II: EXCHANGE RATES DYNAMICS AND PASS-THROUGH EFFECTS Exchange Rate Pass-Through Effect and Monetary Policy in Russia; V.V.Dobrynskaya & D.V.Levando Disaggregated Econometric Models to Forecast Inflation in Hungary; V.Várpalotai PART III: EXCHANGE RATES DYNAMICS AND STRUCTURAL SHOCKS ON ECONOMIES An Open Economy DSGE Model Linking the Euro Area and the US Economy; G.de Walque & R.Wouters Liberalization Shocks and Real Exchange Rate Appreciation in the Transition Economies; C.Papazoglou

PAVLOS KARADELOGLOU is Head of the Global Economy Section in the European Central Bank. He has worked at INSEE (France), at the National Technical University of Athens, Centre of Planning and Economic Research, and at the Bank of Greece. He was also Consultant at the European Commission for two years. VIRGINIE TERRAZA is Assistant Professor at the University of Luxembourg and researcher at the CREFI-LSF. Her main research concerns econometrics methods in fields of financial risk modelling and portfolio management. Presently, her work is concerned with fund investment risks and performan

• Introduction PART I: THE PURCHASING POWER PARITY AND ITS IMPLICATIONS ON EQUILIBRIUM EXCHANGE RATES Three Exchange Rate Puzzles: Fact or Fiction?; R.MacDonald The Real Exchange Rate Misalignment of the Five Central European Countries Single Equation Approach; J.Frait, L.Komárek & M.Melecký Real Equilibrium Exchange Rate in China: Is the Renminbi Undervalued?; V.Coudert & C.Couharde PART II: EXCHANGE RATES DYNAMICS AND PASS-THROUGH EFFECTS Exchange Rate Pass-Through Effect and Monetary Policy in Russia; V.V.Dobrynskaya & D.V.Levando Disaggregated Econometric Models to Forecast Inflation in Hungary; V.Várpalotai PART III: EXCHANGE RATES DYNAMICS AND STRUCTURAL SHOCKS ON ECONOMIES An Open Economy DSGE Model Linking the Euro Area and the US Economy; G.de Walque & R.Wouters Liberalization Shocks and Real Exchange Rate Appreciation in the Transition Economies; C.Papazoglou