Business-cycle development in Hungary and Europe - the consequences of EU and EMU accession for Hungary's labour market

Kalman Dezseri ()

No 136, IWE Working Papers from Institute for World Economics - Centre for Economic and Regional Studies

Abstract: Structural similarities and differences between a country and the economic integration framework to which it belongs show the degree to which the country may be exposed to asymmetric shocks. Synchronization of business cycles implies that asymmetric shock is precluded, or offset by national monetary policies. After joining a monetary union the situation changes. Where synchronization of business cycles is lacking, a common monetary policy will tend to exacerbate differences in the cycles and adversely affect economic performance. In the case of the EU and EMU, want of synchronization between the business cycles of a candidate country and the EU can be offset partly by labour-market flexibility. Joining the EU may mean foregoing some flexibility in the labour market, because the EU labour markets have become rigid and need reforms and greater flexibility themselves.

Keywords: Hungary; Europe; EU accession; EMU; business cycles; labour market (search for similar items in EconPapers)
Pages: 15 pages
Date: 2003-06
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Persistent link: https://EconPapers.repec.org/RePEc:iwe:workpr:136

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