Do the new EU member states form an Optimum Currency Area with the eurozone? Evidence from six Central and Eastern European Countries

Dimitrios Sideris
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Dimitrios Sideris: Bank of Greece and Panteion University

No 15, SEEMHN papers from National Bank of Serbia

Abstract: The present paper examines whether six of the new European Union member states -the six Central and Eastern European Countries- form an optimum currency area (OCA) with the eurozone. The study applies the theory of Generalized Purchasing Power Parity, which analyses the behavior of the long-run real exchange rates of a group of economies with respect to a base currency. The findings indicate that the six countries form an OCA with the eurozone for the period following the introduction of the euro.

Keywords: EU enlargement; OCA; real Exchange rates; Cointegration; GPPP (search for similar items in EconPapers)
JEL-codes: C32 F33 F36 F42 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2009-03
Note: The paper was presented at the Fourth Annual SEEMHN Conference hosted by the National Bank of Serbia, 27 March 2009 in Belgrade.
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Persistent link: https://EconPapers.repec.org/RePEc:nsb:mhnsee:15

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