IDEAS home Printed from https://ideas.repec.org/p/koc/wpaper/1014.html
   My bibliography  Save this paper

Business Cycle Dynamics in the CEE Countries: A Political Economy Approach

Author

Listed:
  • Muge Adalet

    () (Koc University)

  • Sumru Oz

    () (Koc University)

Abstract

This paper uses a simple VAR analysis to examine 5 CEE countries (the Czech Republic, Hungary, Poland, Romania and Slovakia) in order to understand whether their business cycles are synchronized with each other and/or with the major economies that they are supposed to be linked with, namely the US, Germany and Russia. We find that there are differences across the CEE countries themselves and that there is no common CEE business cycle. Comparing the individual CEE business cycles with those of the dominant economies, we find that Hungary and Poland are related to the US business cycle, reflecting the fact that they are more integrated with the global economy, whereas Slovakia is closer to the Russian cycle. Finally, splitting the sample into the late 1990s and 2000s due to the transition nature of these economies in the former period shows that the influence of Russia on the CEE economies has declined over time. However, in contrast to the expectations that CEE countries are likely to be affected by Germany in the second half of the sample due to EU negotiations followed by full membership, among the CEE countries only the business cycle of Slovakia is synchronized with that of Germany. On the other hand the Czech Republic, Hungary and Poland are synchronized with the US business cycle, showing that globalization has decreased the importance of distance.

Suggested Citation

  • Muge Adalet & Sumru Oz, 2010. "Business Cycle Dynamics in the CEE Countries: A Political Economy Approach," Koç University-TUSIAD Economic Research Forum Working Papers 1014, Koc University-TUSIAD Economic Research Forum.
  • Handle: RePEc:koc:wpaper:1014
    as

    Download full text from publisher

    File URL: http://eaf.ku.edu.tr/sites/eaf.ku.edu.tr/files/erf_wp_1014.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Matesanz Gomez & Guillermo J. Ortega & Benno Torgler, 2011. "Measuring globalization: A hierarchical network approach," CREMA Working Paper Series 2011-11, Center for Research in Economics, Management and the Arts (CREMA).
    2. Feldkircher, Martin, 2015. "A global macro model for emerging Europe," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 706-726.
    3. David Matesanz Gomez & Guillermo J Ortega & Benno Torgler, 2012. "Synchronization and Diversity in Business Cycles: A Network Approach Applied to the European Union," School of Economics and Finance Discussion Papers and Working Papers Series 277, School of Economics and Finance, Queensland University of Technology.
    4. Muñoz, Mª Pilar & Márquez, María Dolores & Sánchez, Josep A., 2011. "Contagion between United States and european markets during the recent crises," MPRA Paper 35993, University Library of Munich, Germany.

    More about this item

    Keywords

    Business cycle synchronization; CEE countries; EMU;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F15 - International Economics - - Trade - - - Economic Integration
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:koc:wpaper:1014. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sumru Oz) or (Rebekah McClure). General contact details of provider: http://edirc.repec.org/data/dekoctr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.