Title: Alignment to the eurosystem: some findings from a VAR approach for selected CEE countries

Authors: Tobias Duemmler; Daniel Eissrich; Stephan Kienle

Addresses: Department of Law and Economics, Darmstadt University of Technology TU Darmstadt, Marktplatz 15, 64283 Darmstadt, Germany. ' Huegelstrasse 172, 60431 Frankfurt/Main, Germany. ' Department of Law and Economics, Darmstadt University of Technology, TU Darmstadt, Marktplatz 15, 64283 Darmstadt, Germany

Abstract: The paper focuses on the monetary transmission process in selected Central and Eastern European Economies assuming their future accession to the Euro Area. A sufficient degree of homogeneity between these countries and the Euro Area with respect to economic environment and the reaction to macroeconomic shocks is necessary before an adoption of the common currency – i.e., the abandonment of the own monetary policy – is reasonable. Apply a vector autoregression approach allowing for the restricted data basis. By the analysis of impulse-responses, we provide some empirical evidence that in several potential new member states a certain level of convergence has already taken place.

Keywords: monetary transmission process; CEEC; Central and Eastern European Countries; CEE; VAR; vector autoregressive; euro zone; common currency; convergence; emerging economies; economic policy.

DOI: 10.1504/IJEPEE.2012.045443

International Journal of Economic Policy in Emerging Economies, 2012 Vol.5 No.1, pp.37 - 46

Published online: 15 Nov 2014 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article