Lithuania's Track to the Euro and the Endogeneity Hypothesis
This paper analyses the business cycle synchronization between Lithuania and the Euro area using the structural vector autoregression (SVAR) model with Blanchard and Quah decomposition. The analysis includes experiences both before and after Lithuania pegged its currency to the Euro in the beginning of 2002. The present calculations give positive correlation coefficients for the period 2002-2005 and show that the Lithuanian business cycle becomes more synchronized with the business cycle in the Euro area. Compared with earlier calculations, this result gives a positive outlook and thus corroborates the endogeneity hypothesis of the Optimum Currency Area (OCA) theory in the Lithuanian case. Adoption of the Euro for Lithuania should therefore be of less concern than previously anticipated based on experiences from the years before the Lithuanian currency was fixed to the US dollar.
Volume (Year): 6 (2006)
Issue (Month): 1 (July)
|Contact details of provider:|| Postal: |
Phone: +371 67039320
Fax: +371 67039318
Web page: http://www.biceps.org/Email:
More information through EDIRC
References listed on IDEAS
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.:
- Darvas, Zsolt & Szapáry, György, 2005.
"Business Cycle Sychronization in the Enlarged EU,"
CEPR Discussion Papers
5179, C.E.P.R. Discussion Papers.
- 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 Disturbances," NBER Working Papers 2737, National Bureau of Economic Research, Inc.
- 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.
- Tom Doan, . "RATS programs to replicate Blanchard and Quah AER 1989," Statistical Software Components RTZ00017, Boston College Department of Economics.
- Tom Doan, . "BQDODRAWS: RATS procedure to implement Monte Carlo draws from a VAR with Blanchard-Quah factorization," Statistical Software Components RTS00030, Boston College Department of Economics.
- Bayoumi, Tamim & Eichengreen, Barry, 1992.
"Shocking Aspects of European Monetary Unification,"
CEPR Discussion Papers
643, C.E.P.R. Discussion Papers.
- Tamim Bayoumi & Barry Eichengreen, 1992. "Shocking Aspects of European Monetary Unification," NBER Working Papers 3949, National Bureau of Economic Research, Inc.
- Tamim Bayoumi and Barry Eichengreen., 1992. "Shocking Aspects of European Monetary Unification," Economics Working Papers 92-187, University of California at Berkeley.
- Michael Artis & Massimiliano Marcellino & Tommaso Proietti, 2004.
"Characterising the Business Cycle for Accession Countries,"
- Artis, Michael J & Marcellino, Massimiliano & Proietti, Tommaso, 2004. "Characterizing the Business Cycle for Accession Countries," CEPR Discussion Papers 4457, C.E.P.R. Discussion Papers.
- Michael Artis & Massimiliano Marcellino & Tommaso Proietti, 2004. "Characterising the Business Cycle for Accession Countries," Working Papers 261, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Peter Backé & Christian Thimann & Olga Arratibel & Oscar Calvo-Gonzalez & Arnaud Mehl & Carolin Nerlich, 2004. "The acceding countries’ strategies towards ERM II and the adoption of the euro - an analytical review," Occasional Paper Series 10, European Central Bank.
- Bayoumi, Tamim & Eichengreen, Barry, 1992. "Shocking Aspects of Monetary Unification," Department of Economics, Working Paper Series qt791143kp, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
When requesting a correction, please mention this item's handle: RePEc:bic:journl:v:6:y:2006:i:1:p:53-69. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lelde Ivankova)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.