BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
A meta-analysis of business cycle correlation between the euro area and CEECs: What do we know – and who cares?
() and Iikka Korhonen
Abstract: We review the literature on business-cycle correlation
between the euro area and Central and Eastern European countries (CEECs), a
topic that has gained attention in recent years as new EU entrants prepare
for participation in the monetary union. Our meta-analysis suggests several
CEECs already have comparably high correlation with the euro area business
cycle. We also find that estimation methodologies can have a significant
effect on correlation coefficients. While central bankers are more
conservative in their estimates, we find no evidence of a geographical bias
in the studies.
Keywords: monetary union; optimum currency area; business cycles; meta-analysis; (follow links to similar papers)
JEL-Codes: C42; E32; F15; F31; (follow links to similar papers)
36 pages, December 30, 2004
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