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Similarity of Supply and Demand Shocks Between the Euro Area and the CEECs

  • Fidrmuc, Jarko

    (Osterreichische Nationalbank)

  • Iikka Korhonen

We assess the correlation of supply and demand shocks between the countries of the euro area and the accession countries in the 1990s. Shocks are recovered from estimated structural VAR models of output growth and inflation. We find that some accession countries have a quite high correlation of the underlying shocks with the euro area. However, even for many advanced accession countries, the shocks remain significantly more idiosyncratic. Continuing integration within the EU is likely to align the business cycles of these countries similarly to the sync

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Paper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 77.

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Date of creation: 04 Jun 2003
Date of revision:
Handle: RePEc:ecj:ac2003:77
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  1. Nauro F. Campos & Fabrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," William Davidson Institute Working Papers Series 470, William Davidson Institute at the University of Michigan.
  2. Tamim Bayoumi and Barry Eichengreen., 1992. "Shocking Aspects of European Monetary Unification," Economics Working Papers 92-187, University of California at Berkeley.
  3. Jarko Fidrmuc & Daniela Grozea-Helmenstein & Andreas Wörgötter, 1999. "East-west intra-industry trade dynamics," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(2), pages 332-346, June.
  4. Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-25, July.
  5. 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.
  6. Brada, Josef C. & Ktan, Ali M., 2001. "The convergence of monetary policy between candidate countries and the European Union," ZEI Working Papers B 07-2001, ZEI - Center for European Integration Studies, University of Bonn.
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  8. Fidrmuc, Jan & Horvath, Julius & Fidrmuc, Jarko, 1999. "The Stability of Monetary Unions: Lessons from the Breakup of Czechoslovakia," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 753-781, December.
  9. Kutan, Ali M. & Yigit, Taner M., 2002. "Nominal and real stochastic convergence within transition economies and to the European Union: Evidence from panel data," ZEI Working Papers B 21-2002, ZEI - Center for European Integration Studies, University of Bonn.
  10. Jarko Fidrmuc, 2001. "The Endogeneity of the Optimum Currency Area Criteria, Intraindustry Trade, and EMU Enlargement," LICOS Discussion Papers 10601, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  11. McKinnon, Ronald, 2000. "Mundell, the Euro, and the World Dollar Standard," Journal of Policy Modeling, Elsevier, vol. 22(3), pages 311-324, May.
  12. Frenkel, Michael & Nickel, Christiane & Schmidt, Günter, 1999. "Some shocking aspects of EMU enlargement," Research Notes 99-4, Deutsche Bank Research.
  13. Fidrmuc, Jarko & Korhonen, Iikka, 2001. "Similarity of supply and demand shocks between the Euro area and the CEECs," BOFIT Discussion Papers 14/2001, Bank of Finland, Institute for Economies in Transition.
  14. Fidrmuc, J. & Horváth, J., 1998. "Stability of Monetary Unions : Lessons from the Break-Up of Czechoslovakia," Discussion Paper 1998-74, Tilburg University, Center for Economic Research.
  15. Ronald McKinnon, 2002. "Optimum currency areas and the European experience," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(2), pages 343-364, July.
  16. Maurel, Mathilde, 2002. "On the Way of EMU Enlargement towards CEECs: What is the Appropriate Exchange Rate Regime?," CEPR Discussion Papers 3409, C.E.P.R. Discussion Papers.
  17. Iikka Korhonen, 2003. "Some empirical tests on the integration of economic activity between the euro area and the accession countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(1), pages 177-196, March.
  18. D. Mario Nuti, 2002. "Costs and benefits of unilateral euroization in central eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(2), pages 419-444, July.
  19. Boone, Laurence & Maurel, Mathilde, 1999. "An Optimal Currency Area Perspective of the EU Enlargement to the CEECs," CEPR Discussion Papers 2119, C.E.P.R. Discussion Papers.
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