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After Two Decades of Integration: How Interdependent are Eastern European Economies and the Euro Area?

Listed author(s):
  • Catherine Prettner
  • Klaus Prettner

The article investigates the interrelations between the initial members of the Euro area and five Central and Eastern European economies.Structural vector error correction approach, theoretically derived restrictions on the cointegration matrix, generalized impulse response analysisHigh degree of interconnectedness, positive spillovers of output shocks to the other region, multiplier effect in Eastern Europe, EU-12 interest rates translate into rising CEE-5 interest rates, the reverse is not the case, some evidence for the European Central Banks’ desire towards price stability.

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Paper provided by EcoMod in its series EcoMod2012 with number 4421.

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Date of creation: 01 Jul 2012
Handle: RePEc:ekd:002672:4421
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