IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-08f40025.html
   My bibliography  Save this article

Optimum Currency Areas theory and the Slovak suitability for the euro adoption

Author

Listed:
  • DomeNico Raguseo

    (Economics Faculty (University Matej Bel))

  • Jan Sebo

    (Economics Faculty (University Matej Bel))

Abstract

This paper tests the present readiness of Slovakia to join the European Monetary Union (EMU) based on the classical Optimum Currency Area criteria, the degree of trade intensity and business cycle synchronization. The results do not fully confirm the hypothesis that Slovakia already constitutes an optimum monetary union with the rest of the EMU countries mainly the labour mobility is largely ineffective as adjustment mechanism. But, Slovakia is a open economy, its degree of trade integration is the highest among the Central and Eastern European countries and its economic and production structures are quite similar to the intra-EMU average. Moreover, Slovakia's business cycle appears at least as highly synchronized with the EMU''s one as some present, small and peripheral EMU member countries. This would indicate that this country is equally a suitable candidate for the EMU membership and that the Euro adoption should not increase the likelihood of asymmetric shocks.

Suggested Citation

  • DomeNico Raguseo & Jan Sebo, 2008. "Optimum Currency Areas theory and the Slovak suitability for the euro adoption," Economics Bulletin, AccessEcon, vol. 6(40), pages 1-14.
    • Handle: RePEc:ebl:ecbull:eb-08f40025
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/pubs/EB/2008/Volume6/EB-08F40025A.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-1025, July.
    2. Barry Eichengreen, 1992. "Is Europe an Optimum Currency Area?," Palgrave Macmillan Books, in: Silvio Borner & Herbert Grubel (ed.), The European Community after 1992, chapter 8, pages 138-161, Palgrave Macmillan.
    3. Decressin, Jorg & Fatas, Antonio, 1995. "Regional labor market dynamics in Europe," European Economic Review, Elsevier, vol. 39(9), pages 1627-1655, December.
    4. Itir Ozer & Ibrahim Ozkan, 2007. "Optimum filtering for optimum currency areas criteria," Economics Bulletin, AccessEcon, vol. 6(44), pages 1-18.
    5. repec:ebl:ecbull:v:6:y:2007:i:43:p:1 is not listed on IDEAS
    6. Kenen,Peter B., 1995. "Economic and Monetary Union in Europe," Cambridge Books, Cambridge University Press, number 9780521558839, January.
    7. Paul De Grauwe & Wim Vanhaverbeke, 2014. "Is Europe an Optimum Currency Area? Evidence from Regional Data," World Scientific Book Chapters, in: Exchange Rates and Global Financial Policies, chapter 8, pages 231-252, World Scientific Publishing Co. Pte. Ltd..
    8. Jules-Armand Tapsoba, 2007. "Bilateral Trade and Business Cycles Synchronization: African Monetary Integration Perspective," Post-Print hal-00171756, HAL.
    9. Iikka Korhonen, 2003. "Some empirical tests on the integration of economic activity between the euro area and the accession countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(1), pages 177-196, March.
    10. Tapsoba Jules-Armand, 2007. "Bilateral Trade and Business Cycles Synchronization: African Monetary Integration Perspective," Economics Bulletin, AccessEcon, vol. 6(25), pages 1-15.
    11. Mongelli, Francesco Paolo, 2002. "ìNew" Views on the Optimum Currency Area Theory: What is EMU Telling US?," Royal Economic Society Annual Conference 2002 140, Royal Economic Society.
    12. Fidrmuc, Jan, 2004. "Migration and regional adjustment to asymmetric shocks in transition economies," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 230-247, June.
    13. repec:ebl:ecbull:v:6:y:2007:i:44:p:1-18 is not listed on IDEAS
    14. Jan Fidrmuc, 2002. "Migration and Regional Adjustment and Asymmetric Shocks in Transition Economies," William Davidson Institute Working Papers Series 441, William Davidson Institute at the University of Michigan.
    15. repec:bla:etrans:v:10:y:2002-07:i:2:p:343-364 is not listed on IDEAS
    16. repec:zbw:bofitp:2001_009 is not listed on IDEAS
    17. Fidrmuc, Jan, 2004. "Migration and regional adjustment to asymmetric shocks in transition economies," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 230-247, June.
    18. repec:ebl:ecbull:v:6:y:2007:i:25:p:1-15 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peter Sarlin, 2011. "Evaluating a Self-Organizing Map for Clustering and Visualizing Optimum Currency Area Criteria," Economics Bulletin, AccessEcon, vol. 31(2), pages 1483-1495.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ebl:ecbull:v:6:y:2008:i:40:p:1-14 is not listed on IDEAS
    2. Baum, Sabine & Weingarten, Peter, 2005. "Interregionale Disparitäten und Entwicklung ländlicher Räume als regionalpolitische Herausforderung für die neuen EU-Mitgliedstaaten," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 54(04), pages 1-15.
    3. Lars Jonung & Eoin Drea, 2010. "It Can't Happen, It's a Bad Idea, It Won't Last: U.S. Economists on the EMU and the Euro, 1989–2002," Econ Journal Watch, Econ Journal Watch, vol. 7(1), pages 1-4–52, January.
    4. Zsolt Darvas & György Szapáry, 2008. "Business Cycle Synchronization in the Enlarged EU," Open Economies Review, Springer, vol. 19(1), pages 1-19, February.
    5. Ghatak, Subrata & Pop-Silaghi, Monica Ioana, 2009. "Inter-regional migration in Romania," Economics Discussion Papers 2009-4, School of Economics, Kingston University London.
    6. Mendonça, António & Silvestre, João & Passos, José, 2011. "The shrinking endogeneity of optimum currency areas criteria: Evidence from the European Monetary Union--A beta regression approach," Economics Letters, Elsevier, vol. 113(1), pages 65-69, October.
    7. Wadim Strielkowski & Cathal O'Donoghue, 2006. "Ready to Go? EU Enlargement and Migration Potential: Lessons for the Czech Republic in the Context of Irish Migration Experience," Prague Economic Papers, Prague University of Economics and Business, vol. 2006(1), pages 14-28.
    8. Ricci, Luca Antonio, 2008. "A Model of an Optimum Currency Area," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 2, pages 1-31.
    9. Cseres-Gergely, Zsombor, 2004. "County to county migration and labour market conditions in Hungary between 1994 and 2002," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 37(4), pages 425-436.
    10. Cseres-Gergely, Zsombor, 2004. "County to county migration and labour market conditions in Hungary between 1994 and 2002," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 37(4), pages 425-436.
    11. Salvador Barrios & Marius Brülhart & Robert J.R. Elliott & Marianne Sensier, 2003. "A Tale of Two Cycles: Co‐Fluctuations Between UK Regions and the Euro Zone," Manchester School, University of Manchester, vol. 71(3), pages 265-292, June.
    12. Balogun, Emmanuel Dele, 2007. "Effects of exchange rate policy on bilateral export trade of WAMZ countries," MPRA Paper 6234, University Library of Munich, Germany.
    13. Balogun, Emmanuel Dele, 2007. "Exchange rate policy and export performance of WAMZ countries," MPRA Paper 6233, University Library of Munich, Germany.
    14. Oyenyinka Sunday Omoshoro‐Jones & Lumengo Bonga‐Bonga, 2022. "Intra‐regional spillovers from Nigeria and South Africa to the rest of Africa: New evidence from a FAVAR model," The World Economy, Wiley Blackwell, vol. 45(1), pages 251-275, January.
    15. Jan Fidrmuc & Peter Huber, 2005. "AccessLab: Drawing Conclusions and Deriving Policy Implications," WIFO Studies, WIFO, number 25452.
    16. Itir Ozer & Ibrahim Ozkan, 2008. "Practical Insights From Oca Variable Combinations," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 53(176), pages 38-60, January -.
    17. Marie Vavrejnová, 2004. "Mobilita pracovní síly před a po vstupu ČR do EU," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2004(3), pages 195-218.
    18. Schor, Armand-Denis, 2000. "La théorie des zones monétaires optimales : l’optimum, le praticable, le crédible et le réel," L'Actualité Economique, Société Canadienne de Science Economique, vol. 76(4), pages 545-576, décembre.
    19. Balogun, Emmanuel Dele, 2008. "An Empirical Test of Trade Gravity Model Criteria for the West African Monetary Zone (WAMZ)," MPRA Paper 7083, University Library of Munich, Germany.
    20. Charles Wyplosz, 1997. "EMU: Why and How It Might Happen," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 3-21, Fall.
    21. Mihails Hazans, 2003. "Potential emigration of Latvian labour force after joining the EU and its impact on Latvian labour market," SSE Riga/BICEPS Research Papers 2003-2, Baltic International Centre for Economic Policy Studies (BICEPS);Stockholm School of Economics in Riga (SSE Riga).

    More about this item

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-08f40025. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.