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Business cycle transmission from the euro area to CEECs

  • Sandra Eickmeier

    (Deutsche Bundesbank and University of Cologne)

  • Joerg Breitung

    (Unviersity of Bonn and Deutsche Bundesbank)

A high degree of cyclical synchronization between the new EU member states (NMS) from Central and Eastern Europe and the euro area is generally seen as a prerequisite for successful EMU enlargement. We establish stylized facts on economic linkages between NMS and the euro area using dynamic correlation and cohesion measures. We then identify the main structural common euro-area shocks and investigate their transmission to NMS by means of a large-scale factor model. We compare it to the propagation to current EMU members.

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File URL: http://repec.org/sce2006/up.25731.1140787472.pdf
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Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2006 with number 229.

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Date of creation: 04 Jul 2006
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Handle: RePEc:sce:scecfa:229
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