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How much of the Macroeconomic Variation in Eastern Europe is Attributable to External Shocks?

  • Bartosz Mackowiak

We decompose by origin the sources of the variation in real aggregate output and aggregate price level in the Czech Republic, Hungary and Poland. We find that a sizable fraction of the variation is attributable to external shocks, especially so for aggregate price level. We show that euroarea interest rate shocks can account for a significant fraction of the external spillover effects. We conclude that theoretical models of advanced transition economies and policy rules for these economies should feature a prominent role for external shocks.

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File URL: http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2005-061.pdf
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Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2005-061.

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Length: 33 pages
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:hum:wpaper:sfb649dp2005-061
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