Supply and demand shocks in accession countries to the Economic and Monetary Union

TitleSupply and demand shocks in accession countries to the Economic and Monetary Union
Publication TypeJournal Article
AuthorsHorváth, J., and A. Rátfai
Journal titleJournal of Comparative Economics
Year2004
Pages202 - 211
Volume32
Issue2
Abstract

The success of the enlarged Economic and Monetary Union (EMU) depends on the relative incidence of demand and supply shocks in both the participating and the accession countries. This paper addresses the issue using bivariate vector autoregression models for current and would-be EMU member countries. While the degree of symmetry in business cycle shocks among EMU accession countries is significant, idiosyncratic shocks between current and would-be member states dominate. Our results suggest a costly process of adjustment following EMU enlargement. (C) 2004 Association for Comparative Economic Studies. Published by Elsevier Inc. All rights reserved.

LanguageEnglish
Notes

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Publisher linkhttp://www.sciencedirect.om.hu/science/article/B6WHV-4C6TG16-2/2/81feb6bd102f85b9ff9bebfca33a0fcc?&zone=raall