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The Dynamics of Structural Shocks

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  • Aleksandra Zdzienicka

Abstract

This paper uses VAR and space-state methodology to analyze how the recent developments in 20 European countries have modified the dynamics of structural shocks. The results not only confirm a visible progress in (predominated output fluctuations) supply shocks convergence between the Central and Eastern European Countries (CEECs) and the eurozone, but also corroborate a positive initial impact of Economic and Monetary Union (EMU) creation and European Union (EU) enlargement on supply shocks correlation. In particular, it is found that Croatia, Poland, Slovakia and Slovenia are good candidates to euro adoption under condition of greater fiscal policy alignment.

Suggested Citation

  • Aleksandra Zdzienicka, 2010. "The Dynamics of Structural Shocks," The IUP Journal of Monetary Economics, IUP Publications, vol. 0(3), pages 31-59, August.
    • Handle: RePEc:icf:icfjmo:v:08:y:2010:i:3:p:31-59
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