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Business-cycle development in Hungary and Europe - the consequences of EU and EMU accession for Hungary's labour market

Author

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  • Kalman Dezseri

    (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)

Abstract

Structural similarities and differences between a country and the economic integration framework to which it belongs show the degree to which the country may be exposed to asymmetric shocks. Synchronization of business cycles implies that asymmetric shock is precluded, or offset by national monetary policies. After joining a monetary union the situation changes. Where synchronization of business cycles is lacking, a common monetary policy will tend to exacerbate differences in the cycles and adversely affect economic performance. In the case of the EU and EMU, want of synchronization between the business cycles of a candidate country and the EU can be offset partly by labour-market flexibility. Joining the EU may mean foregoing some flexibility in the labour market, because the EU labour markets have become rigid and need reforms and greater flexibility themselves.

Suggested Citation

  • Kalman Dezseri, 2003. "Business-cycle development in Hungary and Europe - the consequences of EU and EMU accession for Hungary's labour market," IWE Working Papers 136, Institute for World Economics - Centre for Economic and Regional Studies- Hungarian Academy of Sciences.
  • Handle: RePEc:iwe:workpr:136
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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