Comparing economic dynamics in the EU and CEE accession countries

Ralph Süppel

No 267, Working Paper Series from European Central Bank

Abstract: This paper presents evidence for structural differences in economic growth dynamics between the current EU and the central- and eastern European accession countries. Two important results emerge from the analysis. First, accession countries have posted higher average growth and wider output fluctuations than the euro area and other EU countries. Second, a set of different methodologies suggests that business cycles of accession countries have been less synchronised with the euro area than those of the United Kingdom, Sweden and Denmark. It is less clear whether accession countries are also less synchronised than the euro area "peripherals" (Greece, Portugal and Ireland). Moreover, synchrony differed across countries. Some accession economies, particularly Hungary, Poland and Slovenia, showed a close alignment with euro area fluctuations. Others, in particular the Czech Republic and Slovakia, revealed remarkable asymmetries, which are a reminder that sizeable idiosyncratic shocks remain a risk. JEL Classification: E32, E52, F31

Keywords: Central and Eastern Europe; exchange rate; Kalman filter; optimal currency area; structural VAR (search for similar items in EconPapers)
Date: 2003-09
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:2003267

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