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

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  • Catherine Prettner
  • Klaus Prettner

Abstract

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.

Suggested Citation

  • Catherine Prettner & Klaus Prettner, 2012. "After Two Decades of Integration: How Interdependent are Eastern European Economies and the Euro Area?," EcoMod2012 4421, EcoMod.
  • Handle: RePEc:ekd:002672:4421
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    More about this item

    Keywords

    EU-12; CEE-5; Macroeconometric modeling; EU enlargement;

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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