6/19/2018

My plot - technical comments

I tried to create an interactive plot with plotly on the next page. The plot shows the exchange rate (using data from the OECD) since 1989 for 6 European countries in transition (if you accept that Turkey and Russia also belongs to Europe..). A lot of time was spend trying to find a way to better show this with the graph (it is often the small things that take an enormous time to figure out in R..). The advantage of plotly is that it is interactive, so you can navigate on the graph and read the underlying values.

Afterthought..

They all exhibit a significant element of depreciation, however, for Slovakia and the Czech Republic this development has been reversed after the Great Financial Crisis. But the graph is not very succesfull as I was unable to find a way to get the differences out due to the enormous depreciation history of the Turkish Lira (cumulatively it has depreciated from 1 in 1989 vis-a-vis the US dollar to 1720 in 2017). However, also the Polish Zloty (1:26) and the Russian Ruble (1:59) have depreciated at a high rate since the early 1990s. This means that were the citizens of those countries forced to consume everything in US dollars they would be 26, 59 or 1720 times poorer today than they were in 1989. In practise it is of course much more complicated, but not an aspect to be ignored when trying to understand and assess these countries economic development and the challenges they are facing when sellings goods abroad at constantly lower prices while buying goods from abroad at constantly higher prices.