HAL will be down for maintenance from Friday, June 10 at 4pm through Monday, June 13 at 9am. More information
Skip to Main content Skip to Navigation
Journal articles

Exchange Rate Regimes and Supply Shocks Asymmetry: the Case of the Accession Countries

Abstract : This paper reviews the pros and cons of an early EU enlargement towards Central and Eastern European Countries (CEECs hereafter). Firstly, the Maastricht criteria, which cannot be literally assessed during the catching up process, but that nevertheless mirror the huge efforts undertaken in order to (i) stabilise the economies, (ii) converge towards the EU, and then (iii) participate in the EMU, are analysed. Secondly, real convergence is observed to occur at different rates, depending upon the initial conditions faced and the productivity gains realised by each country. Thirdly, computing the correlation of demand and supply shocks in a sample of Euro countries, such as Ireland, Portugal and Spain, at the time when they were entering the EU and the CEECs, gives some indication of the similarity of the business cycles and economic structures of the CEECs on the one hand, and the EU on the other. However, we argue that looking at static correlation only (averaged over the last decade) is too simplistic, as these averages will be blurred by the transition process. Using the Kalman filter, we are able to compute time varying correlation, hence differentiating between the transition and the most recent period. Our results emphasise an ongoing process of demand shocks convergence, but supply shocks divergence. Various exchange rate strategies are then discussed.
Document type :
Journal articles
Complete list of metadata

Contributor : Spire Sciences Po Institutional Repository Connect in order to contact the contributor
Submitted on : Friday, November 5, 2021 - 12:42:41 PM
Last modification on : Friday, April 29, 2022 - 10:12:41 AM


  • HAL Id : hal-03416765, version 1
  • SCIENCESPO : 2441/719



Ian Babetski, Laurence Boone, Mathilde Maurel. Exchange Rate Regimes and Supply Shocks Asymmetry: the Case of the Accession Countries. Journal of Comparative Economics, Elsevier, 2004, 32 (2), pp.212 - 229. ⟨hal-03416765⟩



Record views