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Business cycle transmission from the euro area to CEECs

Author

Listed:
  • Sandra Eickmeier

    (Deutsche Bundesbank and University of Cologne)

  • Joerg Breitung

    (Unviersity of Bonn and Deutsche Bundesbank)

Abstract

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.

Suggested Citation

  • Sandra Eickmeier & Joerg Breitung, 2006. "Business cycle transmission from the euro area to CEECs," Computing in Economics and Finance 2006 229, Society for Computational Economics.
    • Handle: RePEc:sce:scecfa:229
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    2. Alain Kabundi & Francisco Nadal De Simone, 2011. "France in the global economy: a structural approximate dynamic factor model analysis," Empirical Economics, Springer, vol. 41(2), pages 311-342, October.

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    More about this item

    Keywords

    Dynamic factor models; international business cycles; EMU enlargement; sign restrictions;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

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