Business Cycle Synchronization through the Lens of a DSGE Model
The goal of this paper is to examine business cycle synchronization between the Czech economy and the euro area via a fully specified DSGE model. Using a two-country DSGE model I decompose the observed variables into the contributions of structural shocks and then compute conditional correlations. I also examine how these correlations evolve over time. The results indicate that productivity shocks in the tradable sector are the driving forces of different business cycle behavior, while investment efficiency shocks contribute to symmetric behavior of the two economies. The impact of shocks is most symmetric in the case of investment, output, and interest rates; the impact of shocks on these variables is highly correlated. There seems to be convergence of business cycles in the case of consumption, investment, and output, as the overall impact of shocks on these variables is getting more and more symmetric over time.
Volume (Year): 63 (2013)
Issue (Month): 2 (May)
|Contact details of provider:|| Postal: Opletalova 26, CZ-110 00 Prague|
Phone: +420 2 222112330
Fax: +420 2 22112304
Web page: http://ies.fsv.cuni.cz/
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.:
- Silvana Tenreyro & Robert J. Barro, 2002.
"Economic effects of currency unions,"
02-4, Federal Reserve Bank of Boston.
- Alberto Alesina & Robert J. Barro, 2002.
The Quarterly Journal of Economics,
Oxford University Press, vol. 117(2), pages 409-436.
- Jakob de Haan & Robert Inklaar & Richard Jong-A-Pin, 2008.
"Will Business Cycles In The Euro Area Converge? A Critical Survey Of Empirical Research,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 22(2), pages 234-273, 04.
- Haan, Jakob de & Inklaar, Robert & Jong-A-Pin, Richard, 2005. "Will business cycles in the Euro Area converge : a critical survey of empirical research," CCSO Working Papers 200508, University of Groningen, CCSO Centre for Economic Research.
- Marcin Kolasa, 2013.
"Business cycles in EU new member states: How and why are they different?,"
National Bank of Poland Working Papers
156, National Bank of Poland, Economic Institute.
- Kolasa, Marcin, 2013. "Business cycles in EU new member states: How and why are they different?," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 487-496.
- 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.
- 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.
- Kolasa, Marcin, 2009.
"Structural heterogeneity or asymmetric shocks? Poland and the euro area through the lens of a two-country DSGE model,"
Elsevier, vol. 26(6), pages 1245-1269, November.
- Marcin Kolasa, 2008. "Structural heterogeneity or asymmetric shocks? Poland and the euro area through the lens of a two-country DSGE model," National Bank of Poland Working Papers 49, National Bank of Poland, Economic Institute.
- Kolasa, Marcin, 2008. "Structural heterogeneity or asymmetric shocks? Poland and the euro area through the lens of a two-country DSGE model," MPRA Paper 8750, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:fau:fauart:v:63:y:2013:i:2:p:180-196. 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: (Lenka Herrmannova)
If references are entirely missing, you can add them using this form.