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Exploring CESEE-EMU Synchronisation Patterns

Author

Listed:
  • Valerija Botric

    (The Institute of Economics, Zagreb)

  • Tanja Broz

    () (The Institute of Economics, Zagreb)

Abstract

We study the degree of business cycle similarity between the Central and South-Eastern European (CESEE) countries and the Eurozone members. The special emphasis is put on the differences between countries that have already joined the European Union and those that are in different stages of integration. We introduce a specific measure of business cycle synchronisation by comparing the evolution of the growth rates in country pairs and further seek to identify determinants of these synchronisation patterns using pooled probit model. The results of the analysis have indicated that the real effective exchange rate seems to be an important predictor of synchronisation between CESSEE countries and the original Eurozone members. Our results have also indicated that trade becomes important synchronisation factor only for the countries that became EU members during the analysed period. The trade creation possibilities emerging from the common market seem to change the trade patterns in countries that became the EU members during the analysed period and contribute positively to the overall business synchronisation. This result seems encouraging for the EU aspiring countries.

Suggested Citation

  • Valerija Botric & Tanja Broz, 2016. "Exploring CESEE-EMU Synchronisation Patterns," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 18(42), pages 255-255, May.
  • Handle: RePEc:aes:amfeco:v:42:y:2016:i:18:p:255
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    References listed on IDEAS

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    More about this item

    Keywords

    business cycle synchronisation; economic integration; Central and South- Eastern European countries; Eurozone;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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