Similarity of supply and demand shocks in the European Union and acceding countries (implications for the Czech republic and Slovakia)

In this contribution, we compare the correlation of supply and demand shocks for the countries of the euro zone and the acceding countries in Central Europe. Demand and supply shocks are recovered from estimated structural VAR models of output growth and inflation in individual countries. We find that Poland and Hungary face already a comparably high similarity with the countries of the current euro zone. However, the remaining countries show still significant differences in business cycles as compared to the euro zone. This is likely to indicate that the loss of monetary sovereignty may be costly. In turn, the integration is expected to align the business cycles of these countries in the medium run. We document a similar development for the countries of the European Union in the 1990s

Business cycle · Current account · Czech · Demand shock · Economics · European union · Exchange rate · Inflation (cosmology) · International economics · International trade · Macroeconomics · Monetary economics · Monetary policy · Political science · Politics · Sovereignty · Supply and demand · Supply shock · Economic Growth and Productivity · Global Financial Crisis and Policies · Monetary Policy and Economic Impact

• Comparing the Convergence of Czech Economy with Selected Euro Zone Members Using Impulse-Response Functions and Supply and Demand Shocks

  Open Access•Roman Hušek, Tomáš Formánek•Politická ekonomie•2011

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