Synchronizacja cykli koniunkturalnych wybranych panstw bylej Jugoslawii ze strefa euro[Synchronization of business cycles of selected countries of former Yugoslavia with the euro area]

Motivation: R. Mundell’s optimal currency area theory stipulates that for countries joining a currency area must achieve business cycle synchronization with the area. This criterion is not formally required for the euro area, so is often omitted in the analysis of preparation of the particular European Union (EU) countries to join the euro area. Aim: The aim of this article is to analyze the degree of business cycle synchronization of four countries of the former Yugoslavia with the euro area. The former Yugoslavia countries are on different stages of European integration and convergence with the EU economy, so the degree of synchronization of business cycles between countries is also different. Materials and methods: In this article, the time series of GDP and industrial production of the euro area and four countries of the former Yugoslavia (Slovenia, Croatia, Serbia and Macedonia) were used. They were decomposed into trend and cyclical component using the Hodrick–Prescott filter twice. Afterwards, the classical and the deviation cycles were obtained and turning points were identified, which were the basis for the analysis of cycle synchronization. Results: Among the analyzed countries of the former Yugoslavia, the Slovenian economy is well-synchronized with the economy of the euro area. In the case of Croatia, there was a poor synchronization in the industrial production category. In the case of Serbia and Macedonia, there was quite a weak synchronization in each category, especially GDP, which was indicated by a lower level of correlation coefficient and additional business cycles.