Business Cycles Synchronization with the Euro Area. The Case of CEE Countries

Marinaº Marius-Corneliu
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Marinaº Marius-Corneliu: Bucharest University of Economic Studies, Department of Economics
Authors registered in the RePEc Author Service: Marius Corneliu Marinas

Ovidius University Annals, Economic Sciences Series, 2013, vol. XIII, issue 1, 220-225

Abstract: The optimum currency area theory and the economic literature settled that the convergence of the business cycles is one of the most important criteria in establishing the costs and the benefits of the adhesion to a monetary union. If the action of various types of economic shocks, respectively the speed in neutralizing them is very similar among economies, then their own monetary policy will no longer be necessary as those shocks may be adjusted by means of a common monetary policy. Thus, the costs for giving up their own currency get decreased, thus increasing the benefits of the monetary integration. In this study, I have proposed to estimate the correlation of the CEE countries' business cycles with the average of the Euro area, in order to establish the extent of the potential costs generated by the loss of monetary independence.

Keywords: business cycle synchronization; Hodrick-Prescott filter; statistic correlation; Euro area (search for similar items in EconPapers)
JEL-codes: E32 F15 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xii:y:2012:i:1:p:220-225

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