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Real And Nominal Convergence, The Syncronization Of Business Cycles Between The New Eurozone Members (Nem) Slovenia, Slovakia, Cyprus , Estonia And The Core Eurozone

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  • Zapodeanu Daniela

    (University of Oradea)

Abstract

After the accession of newly members in the European Union in 2004 and 2007 these countries are expected to adopt the common currency: Euro. The nominal convergence must be achieved until then as the Maastricht treaty implies but in order to be an Optimum-Currency-Area (OCA) these countries economies are expect to behave similarly to those of the Eurozone. We test the synchronization of the business cycle between the EU12 and Slovenia, Slovakia, Cyprus and Estonia using as a measure their GDP evolution . The GDP for all the states are seasonally adjusted using the X12-ARIMA methodology, we apply the Hodrick-Prescott filter in order to capture the trend and cycle of GDP, using the correlation coefficient we test their level of synchronisation. The main findings are that their level of synchronisation has rise over the 1995-2011 period, also adopting the common currency Euro doesn’t seem to have an impact on the level of busyness cycle synchronisation.

Suggested Citation

  • Zapodeanu Daniela, 2012. "Real And Nominal Convergence, The Syncronization Of Business Cycles Between The New Eurozone Members (Nem) Slovenia, Slovakia, Cyprus , Estonia And The Core Eurozone," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 629-634, December.
  • Handle: RePEc:ora:journl:v:1:y:2012:i:2:p:629-634
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    File URL: http://anale.steconomiceuoradea.ro/volume/2012/n2/095.pdf
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    References listed on IDEAS

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    1. Marianne Baxter & Robert G. King, 1999. "Measuring Business Cycles: Approximate Band-Pass Filters For Economic Time Series," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 575-593, November.
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    3. Alberto Alesina & Robert J. Barro & Silvana Tenreyro, 2003. "Optimal Currency Areas," NBER Chapters,in: NBER Macroeconomics Annual 2002, Volume 17, pages 301-356 National Bureau of Economic Research, Inc.
    4. António Afonso & Davide Furceri, 2009. "Sectoral Business Cycle Synchronization in the European Union," Economics Bulletin, AccessEcon, vol. 29(4), pages 2996-3014.
    5. Dumitru, Ionut & Dumitru, Ionela, 2011. "Similarity of Supply and Demand Shocks Between the New Member States and the Euro Zone. The Case of Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 5-19, March.
    6. Zsolt Darvas & György Szapáry, 2008. "Business Cycle Synchronization in the Enlarged EU," Open Economies Review, Springer, vol. 19(1), pages 1-19, February.
    7. Sander, Harald & Kleimeier, Stefanie, 2004. "Convergence in euro-zone retail banking? What interest rate pass-through tells us about monetary policy transmission, competition and integration," Journal of International Money and Finance, Elsevier, vol. 23(3), pages 461-492, April.
    8. Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
    9. Mongelli, Francesco Paolo, 2002. "ìNew" Views on the Optimum Currency Area Theory: What is EMU Telling US?," Royal Economic Society Annual Conference 2002 140, Royal Economic Society.
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    More about this item

    Keywords

    Eurozone; business cycle synchronisation; Hodrick-Prescott filter; Optimum-Currency-Area;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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