Quotation Prettner, Catherine, Prettner, Klaus. 2015. How Interdependent are Eastern European Economies and the Euro Area? Quarterly Review of Economics and Finance. 58 18-31.




This article investigates the interrelations between the Euro area and five Central and Eastern European economies. Using an open economy framework, we derive theoretical restrictions to be imposed on the cointegration space of a structural vector error correction model. We employ generalized impulse response analysis to assess the effects of shocks to output, interest rates, the exchange rate, and relative prices on both areas. The results show strong inter-regional spillovers of output shocks with the magnitude being similarly strong in both areas. Furthermore, we find multiplier effects in Central and Eastern Europe and some evidence for the European Central Bank's desire for price stability.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Quarterly Review of Economics and Finance
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-B, VW-D, WH-B
Language English
Title How Interdependent are Eastern European Economies and the Euro Area?
Volume 58
Year 2015
Page from 18
Page to 31
Reviewed? Y
URL https://www.sciencedirect.com/science/article/pii/S1062976915000319
DOI https://doi.org/10.1016/j.qref.2015.02.012
Open Access N


Prettner, Catherine (Former researcher)
Prettner, Klaus (Details)
Department of Economics (Crespo Cuaresma) (Details)
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