How interdependent are Eastern European economies and the Euro area?

Catherine Prettner and Klaus Prettner

No 187, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: This article investigates the interrelations between the Euro area and five Central and Eastern European economies. Using an open economy framework, we derive theoretical restrictions to be imposed on the cointegration space of a structural vector error correction model. We employ generalized impulse response analysis to assess the effects of shocks in output, interest rates, the exchange rate, and relative prices on both areas. The results show strong international spillovers in output with the magnitude being similarly strong in both areas. Furthermore, we find multiplier effects in Central and Eastern Europe and some evidence for the European Central Bank´s desire toward price stability.

Keywords: European Economic Integration; Structural Vector Error Correction Model; Generalized Impulse Response Analysis; International Transmission of Shocks (search for similar items in EconPapers)
JEL-codes: C11 C32 F41 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-eec, nep-opm and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/92493/1/778404692.pdf (application/pdf)

Related works:
Journal Article: How interdependent are Eastern European economies and the Euro area? (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:187

Access Statistics for this paper

More papers in University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().