TY - JOUR N2 - Poland is expected to enter the Exchange Rate Mechanism II (ERM II). The European Central Bank recommends that the ERM II central rate should reflect the best possible assessment of the equilibrium exchange rate. Since the equilibrium rate is changing in time, it is important to identify the pushing and pulling forces of the exchange rate. This knowledge will let the authorities to defend only the exchange rate that is in equilibrium and to assess outcomes of their actions. We use the VEC approach of Johansen to estimate the behavioral equilibrium exchange rate and to identify the pushing forces of the Polish zloty/euro rate. We apply the Gonzalo-Granger decomposition to calculate the permanent equilibrium exchange rate and to identify the pulling forces of the zloty exchange rate. We demonstrate that this approach may be useful for Polish authorities while entering the ERM II as well as within that mechanism. L1 - http://journals.pan.pl/Content/106533/PDF-MASTER/mainFile.pdf L2 - http://journals.pan.pl/Content/106533 PY - 2009 IS - No 1 EP - 55 DO - 10.24425/cejeme.2009.122221 KW - equilibrium exchange rate KW - cointegration analysis KW - Gonzalo-Granger decomposition KW - ERM II A1 - Bęza-Bojanowska, Joanna PB - Oddział PAN w Łodzi DA - 31.03.2009 T1 - Behavioural and Permanent Zloty/Euro Equilibrium Rate SP - 35 UR - http://journals.pan.pl/dlibra/publication/edition/106533 T2 - Central European Journal of Economic Modelling and Econometrics ER -