L'adhésion des Peco (Pays d'E urope centrale et orientale) à l'Union européenne et l'endogénéité des chocs d'offre et de demande

Jan Babetskii

Economie & Prévision, 2004, vol. 163, issue 2, 33-49

Abstract: The European Commission (1990) reports that closer integration reduces the frequency of asymmetric shocks and synchronizes business cycles more between countries. However, Krugman (1993) posits that closer integration entails greater specialization and hence greater risks of individual shocks. This paper draws on evidence from a group of CEEC countries to determine which argument is supported by the data. It does so by comparing supply and demand shock asymmetry coefficients with trade intensity and exchange rate indicators over time. We find that (i) an increase in trade intensity gives rise to greater demand shock symmetry and the effect of integration on supply shock asymmetry varies from country to country; (ii) a decrease in exchange rate volatility has a positive effect on demand shock convergence. TheresultsconfirmtheEuropean Commission?s view andKenen?sargument(2001) thattheeffectof trade integration on shock asymmetry depends on the type of shock.

Keywords: EU enlargement; business cycle; trade; OCA (optimal currency area) (search for similar items in EconPapers)
Date: 2004
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