Some empirical tests on the integration of economic activity between the euro area and the accession countries
Abstract
This note looks ata the correlation of short-term business cycles in the euro area and the Eu accession countries. This issue is assessed with the help of vector autoregressive models. There are clear differences in the degree of correlation between acces-sion countries. For Hungary and Slovenia, euro area shocks can explain a large share of variation in industrial production, while for some countries this influence is much smaller. For the latter countries, the results imly that joiniing the monetary union could entail reasonable large costs, unless their business cycles converge closer to the euro area cycle. Generally, for smaller countries the relative influence of the euro area business cycle is larger. Also, it is found that the most advanced acces-sion countries are at least as integrated with the euro area business cycle as some small present member countries of the mo-netary union.Download Info
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Paper provided by EconWPA in its series Macroeconomics with number 0209006.Length: 24 pages
Date of creation: 19 Sep 2002
Date of revision:
Handle: RePEc:wpa:wuwpma:0209006
Note: Type of Document - SWP; prepared on PC; pages: 24; figures: included
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Web page: http://128.118.178.162
Related research
Keywords: optimal currency area; monetary union; EU enlargement;Other versions of this item:
- Iikka Korhonen, 2003. "Some empirical tests on the integration of economic activity between the euro area and the accession countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(1), pages 177-196, March.
- Korhonen, Iikka, 2001. "Some empirical tests on the integration of economic activity between the Euro area and the accession countries," BOFIT Discussion Papers 9/2001, Bank of Finland, Institute for Economies in Transition.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- F15 - International Economics - - Trade - - - Economic Integration
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-09-28 (All new papers)
- NEP-EEC-2002-09-28 (European Economics)
- NEP-IFN-2002-09-28 (International Finance)
References
References listed on IDEASPlease 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.:
- Olivier Jean Blanchard & Danny Quah, 1990.
"The Dynamic Effects of Aggregate Demand and Supply Disturbances,"
NBER Working Papers
2737, National Bureau of Economic Research, Inc.
- Blanchard, Olivier Jean & Quah, Danny, 1989. "The Dynamic Effects of Aggregate Demand and Supply Disturbances," American Economic Review, American Economic Association, vol. 79(4), pages 655-73, September.
- Olivier Jean Blanchard & Danny Quah, 1988. "The Dynamic Effects of Aggregate Demand and Supply Disturbance," Working papers 497, Massachusetts Institute of Technology (MIT), Department of Economics.
- Brada, Josef C. & Kutan, Ali M., 2001.
"The convergence of monetary policy between candidate countries and the European Union,"
Economic Systems,
Elsevier, vol. 25(3), pages 215-231, September.
- Brada, Josef C. & Ktan, Ali M., 2001. "The convergence of monetary policy between candidate countries and the European Union," ZEI Working Papers B 07-2001, ZEI - Center for European Integration Studies, University of Bonn.
- Lubos Komarek & Zdenek Cech & Roman Horvath, 2003. "Optimum Currency Area Indices - How Close is the Czech Republic to the Eurozone?," Working Papers 2003/10, Czech National Bank, Research Department.
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