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Oca Indexes And Convergence Process In Europe

Author

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  • Jakub FRYDRYCH
  • Stanislav BURIAN

Abstract

This paper evaluates the European monetary convergence for period 2001 and 2013. The main purpose of this contribution is the estimation of the so-called OCA index, which indicates the proximity of two economic areas. The paper is theoretically based mainly on the research of Bayoumi, Eichengreen (1997) and Horváth, Komárek (2003). Selection and calculation of variables precedes the econometric analysis, and those variables correspond to the basic characteristics of an optimum currency area. Although the estimated model fulfills the conditions of economic and econometric verifications, its explanatory capabilities are significantly reduced due to the limited set of input data. Results of the analysis point to relatively stable values of indices in the period, but their further examination of the development in time reveals a steady deterioration in the case of almost all economies. JEL Codes - E42, F33

Suggested Citation

  • Jakub FRYDRYCH & Stanislav BURIAN, 2017. "Oca Indexes And Convergence Process In Europe," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 64(2), pages 187-197, June.
    • Handle: RePEc:aic:saebjn:v:64:y:2017:i:2:p:187-197:n:66
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    File URL: http://saeb.feaa.uaic.ro/index.php/saeb/article/view/1048
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    References listed on IDEAS

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    1. Chrysost BANGAKE, 2007. "Exchange Rate Volatility and Optimum Currency Area Index : Evidence from Africa," LEO Working Papers / DR LEO 603, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    2. Chrysost Bangaké, 2008. "Exchange Rate Volatility and Optimum Currency Area: Evidence from Africa," Economics Bulletin, AccessEcon, vol. 6(12), pages 1-10.
    3. Michal SKOREPA, 2013. "Troubles in the Euro Area Periphery: The View through the Lens of a Simple Convergence-Sensitive Optimum Currency Area Index," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 63(2), pages 129-151, May.
    4. repec:ebl:ecbull:v:6:y:2008:i:12:p:1-10 is not listed on IDEAS
    5. Michal Skořepa, 2011. "A convergence-sensitive optimum-currency-area index," Working Papers IES 2011/23, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jul 2011.
    6. Mongelli, Francesco Paolo, 2002. ""New" views on the optimum currency area theory: what is EMU telling us?," Working Paper Series 138, European Central Bank.
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    Cited by:

    1. Peter Dreuw, 2023. "Structural time series models and synthetic controls—assessing the impact of the euro adoption," Empirical Economics, Springer, vol. 64(2), pages 681-725, February.

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    More about this item

    Keywords

    EMU; OCA index; convergence; monetary policy; optimum currency area;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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