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Convergence between the business cycles of Central and Eastern European countries and the Euro area

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  • Nenad Stanisic

    () (University of Kragujevac, Faculty of Economics)

Abstract

Although entry to the Euro area (EA) is based only on fulfilment of the Maastricht criteria, implementation of optimum currency criteria and real economic convergence determines the benefits and costs of monetary integration. This paper focuses on the synchronization of business cycles among Central and Eastern European countries (CEECs) and the EA. Business cycles are extracted from GDP data series using a double Hodrick–Prescott filter method. The degree of co-movement of cycles is evaluated on the basis of various methods of rolling correlation. Results show that there is no common CEE business cycle, although a synchronization trend is evident. Similarly, there is a strong trend of convergence of CEEC national business cycles toward that of the EA.

Suggested Citation

  • Nenad Stanisic, 2013. "Convergence between the business cycles of Central and Eastern European countries and the Euro area," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 13(1), pages 63-74, July.
  • Handle: RePEc:bic:journl:v:13:y:2013:i:1:p:63-74
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    Cited by:

    1. 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.
    2. Carlo Di Giorgio, 2016. "Business Cycle Synchronization of CEECs with the Euro Area: A Regime Switching Approach," Journal of Common Market Studies, Wiley Blackwell, vol. 54(2), pages 284-300, March.

    More about this item

    Keywords

    Business cycles; Central and Eastern European countries; Monetary integration; Euro area;

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles

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