Business Cycle Correlation of the New Meber States with Eurozone - The Case of Romania
AbstractThis paper assesses the degree of readiness of New Member States (NMS) of the EU, including Romania, to adopt euro, mainly based on an optimal currency area (OCA) criterium. Using three consensus measures of output gap based on revisions of the estimated output gaps computed by 5 filtering techniques and a benchmark method based on Principal Component Analysis (PCA) we estimated the business cycle correlation between NMS and eurozone. Our findings suggest that the correlation of the business cycle in the case of Romania is one of the lowest among NMS, although it increased tremendously in the last years. The main conclusion of our paper is the fact that Romania, as well as some other NMS countries still need time to progress on the real convergence criteria in order to adopt euro without major costs.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Institute for Economic Forecasting in its journal Romanian Journal for Economic Forecasting.
Volume (Year): (2010)
Issue (Month): 4 (December)
Contact details of provider:
Postal: Casa Academiei, Calea 13, Septembrie nr.13, sector 5, Bucureşti 761172
Phone: 004 021 3188148
Fax: 004 021 3188148
Web page: http://www.ipe.ro/
More information through EDIRC
OCA; output gap; business cycle synchronization; euro adoption; convergence;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Harding, Don & Pagan, Adrian, 2001. "Extracting, Using and Analysing Cyclical Information," MPRA Paper 15, University Library of Munich, Germany.
- Cohen, Daniel & Wyplosz, Charles, 1989. "The European Monetary Union: An Agnostic Evaluation," CEPR Discussion Papers 306, C.E.P.R. Discussion Papers.
- Fleming, J Marcus, 1971. "On Exchange Rate Unification," Economic Journal, Royal Economic Society, vol. 81(323), pages 467-88, September.
- Fidrmuc, Jarko & Korhonen, Iikka, 2006.
"Meta-analysis of the business cycle correlation between the euro area and the CEECs,"
Journal of Comparative Economics,
Elsevier, vol. 34(3), pages 518-537, September.
- Jarko Fidrmuc & Iikka Korhonen, 2006. "Meta-Analysis of the Business Cycle Correlation between the Euro Area and the CEECs," CESifo Working Paper Series 1693, CESifo Group Munich.
- Don Harding & Adrian Pagan, 2000.
"Disecting the Cycle: A Methodological Investigation,"
Econometric Society World Congress 2000 Contributed Papers
1164, Econometric Society.
- Harding, Don & Pagan, Adrian, 2002. "Dissecting the cycle: a methodological investigation," Journal of Monetary Economics, Elsevier, vol. 49(2), pages 365-381, March.
- Iancu, Aurel, 2007. "Economic Convergence. Applications - Second Part -," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 4(4), pages 24-48, December.
- Adrian Pagan & Don Harding, 2005. "A suggested framework for classifying the modes of cycle research," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(2), pages 151-159.
- Canova, Fabio, 1998.
"Detrending and business cycle facts,"
Journal of Monetary Economics,
Elsevier, vol. 41(3), pages 475-512, May.
- Dobrescu, Emilian, 2007. "Modelling The Romanian Economy: Some Data Problems," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 4(1), pages 7-25, March.
- Don Harding & Adrian Pagan, 2006. "Measurement of Business Cycles," Department of Economics - Working Papers Series 966, The University of Melbourne.
- Zsolt Darvas & Gabor Vadas, 2005.
"A New Method for Combining Detrending Techniques with Application to Business Cycle Synchronization of the New EU Members,"
MNB Working Papers
2005/05, Magyar Nemzeti Bank (the central bank of Hungary).
- Zsolt Darvas & Gábor Vadas, 2005. "A New Method for Combining Detrending Techniques with Application to Business Cycle Synchronization of the New EU Members," Working Papers 0505, Department of Mathematical Economics and Economic Analysis, Corvinus University of Budapest.
- Savoiu, Gheorghe & Dinu, Vasile & Ciuca, Suzana, 2013. "Foreign Direct Investment based on Country Risk and other Macroconomic Factors. Econometric Models for Romanian Economy," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 39-61, March.
- Caraiani, Petre, 2012. "Stylized facts of business cycles in a transition economy in time and frequency," Economic Modelling, Elsevier, vol. 29(6), pages 2163-2173.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Corina Saman).
If references are entirely missing, you can add them using this form.