Demand and supply shocks synchronisation. Evidence from Romania in the context of European Integration
The current paper looks at the degree of demand and supply shocks synchronization between Euro Area and Romania together with three other EMU candidate countries to assess the implications for the economy of joining the single currency area. Shock identification was done using a Structural VAR analysis. I find that Romania has positive correlation of supply shocks with EA and its member countries and zero correlation of demand shocks which is likely to have been triggered by different economic policies Romania followed in the last years. At the same time, the paper supports the view that in light of the optimal currency area, allowing Romania and the other analyzed countries to join EMU would not add to much noise. It is rather a question for the individual aspiring countries to ensure that they have the mechanisms in place to implement adequate fiscal policies and synchronization in their business cycles, lest they find themselves without appropriate demand management.
|Date of creation:||Sep 2008|
|Contact details of provider:|| Postal: 6 ROMANA PLACE, 70167 - BUCHAREST|
Web page: http://www.dofin.ase.ro/carfib/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:cab:wpaefr:18. 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: (Ciprian Necula)
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.