engleski

Comovements of Production Activity in Euro Area and Croatia

The paper tries to give an answer on the current degree of comovements of production activity in euro area and Croatia or in other words on business cycle synchronization in Croatia to the euro area cycle. It is known that participation in a currency union may itself lead to greater synchronization of business cycles. If the business cycles are sufficiently synchronized then the new member(s) can easy give up monetary and exchange rate policy independence.

comovements; business cycle; VAR model; cointegration; impulse response function

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