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Title: Characterizing the Business Cycle for Accession Countries

Author(s): Michael J Artis, Massimiliano Marcellino and Tommaso Proietti

Publication Date: June 2004

Keyword(s): business cycles, cycle synchronization, dating algorithms, eu enlargement and seasonal adjustment

Programme Area(s): International Macroeconomics

Abstract: We analyse the evolution of the business cycle in the accession countries, after a careful examination of the seasonal properties of the available series and the required modification of the cycle dating procedures. We then focus on the degree of cyclical concordance within the group of accession countries, which turns out to be in general lower than that between the existing EU countries (the Baltic countries constitute an exception). With respect to the euro zone, the indications of synchronization are also generally low and lower relative to the position obtaining for countries taking part in previous enlargements (with the exceptions of Poland, Slovenia and Hungary). In the light of the optimal currency area literature, these results cast doubts on the usefulness of adopting the euro in the near future for most accession countries, though other criteria such as the extent of trade and the gains in credibility may point in a different direction.

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Bibliographic Reference

Artis, M, Marcellino, M and Proietti, T. 2004. 'Characterizing the Business Cycle for Accession Countries'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4457