The article examines how exchange rates in Central European countries are influenced by various factors like price levels, output shocks, interest rates, and foreign assets. The researchers found that exchange rates are not always in line with the Balassa-Samuelson effect. They also discovered that the adjustment of exchange rates can be different depending on the size and direction of misalignment. Each country in Central Europe has unique parameters affecting their exchange rates, which challenges the use of panel data. Overall, recent data suggests these countries are meeting the criteria for exchange-rate stability.