An Evaluation of Selected Economic Areas according to Similarity of Supply and Demand Shocks

• Authors: Stanislav Kappel
• Languages of publication: EN

Abstracts

EN

The Euro Area remains a well-known monetary union in the World. But the possibilities of creation of new monetary unions are discussed. It is spoken about NAFTA (Canada, Mexico and the United States) or MERCOSUR (Argentina, Brazil, Paraguay, Uruguay and Venezuela). The aim of this paper is to assess the similarity of demand and supply shocks in the countries of NAFTA and MERCOSUR, and to compare it with the countries of the Euro Area. For these aims, correlation and structural vector autoregression methods are used. Methods are based on Blanchard and Quah (1989) and Bayoumi and Eichengreen (1993). We confirm the existence of core states and periphery states in the Euro Area with some exceptions. If we compare supply and demand shocks, we find more similarity in the case of supply shocks in the countries of the Euro Area. According to the results, the countries of NAFTA are more appropriate for the creation of monetary union than the countries of MERCOSUR. The countries of NAFTA achieve high correlation coefficients of supply and demand shocks (except Mexico for supply shocks).

Keywords

EN

OCA theory; supply and demand shocks; the Euro Area; NAFTA; MERCOSUR

• Publisher: Sciendo
• Journal: Review of Economic Perspectives
• Year: 2015
• Volume: 15
• Issue: 2
• Pages: 221-240

Dates

published

2015-06-01

online

2015-07-16

Contributors

author

Stanislav Kappel

• VŠB – Technical University of Ostrava, Department of Economic Policy, Faculty of Economy, Sokolská třída 33, 701 21 Ostrava, Czech Republic

References

• BAYOUMI, T., EICHENGREEN, B. (1993). Shocking Aspects of European Monetary Integration. In Adjustment and Growth in the European Monetary Union. Cambridge: Cambridge University Press, pp. 193-230. ISBN 978-05214400196.
• BLANCHARD, O. J., QUAH, D. (1989). The Dynamics Effects of Aggregate Demand and Supply Disturbances. American Economic Review.79 (4), pp. 655 - 673. ISSN 0002-8282.
• CHRISZT, M. (2000).Perspective in a Potential North American Monetary Union. Federal Reserve Bank of Atlanta. Economic Review. 2000 (4), pp. 29-38. ISSN 0732-1813.
• COHEN, B. J. (2004). North American Monetary Union: A United States Perspective. Orfalea Centre for Global & International Studies. UC Santa Barbara: Global and International Studies.
• DĚDEK, O. (2008). Historie evropské měnové integrace. Od národních měn k euru. Praha: C. H. Beck. ISBN 978-80-7400-076-8.
• Economic Commission for Latin America and the Caribbean. (2014). CEPALSTAT. Database and Statistical Publications. Retrieved August 20, 2014, from http://estadisticas.cepal.org/cepalstat/WEB_CEPALSTAT/estadisticasIndicadores.asp?idioma=i.
• Eurostat. (2014). Statistics Database. Retrieved July 15, 2014, from http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database.
• FIDRMUC, J., KORHONEN, I. (2003). Similarity of Supply and Demand Shocks Between the Euro Area and the CEECs. Economic Systems. 27 (3), pp. 313-334. ISSN 0939-3625.
• FIDRMUC, J., KORHONEN, I. (2006). Meta-Analysis of the Business Cycle Correlation between the Euro Area and the CEECs. CESifo Working Paper No. 1693.
• FRANKEL, J. A., ROSE, A. K. (1996). The Endogenity of the Optimum Currency Area Criteria. NBER Working Papers 5700. Cambridge (MA): National Bureau of Economic Research.
• FRENKEL, M., NICKEL, C. (2002). How Symmetric Are the Shocks and the Shock Adjustment Dynamics Between the Euro Area and Central and Eastern European Countries? IMF Working Paper 02/222.
• GRAUWE, P. de (2014). Economics of Monetary Union. Oxford: Oxford University Press. ISBN 978-0-19-968444-1.
• GRIGOLI, F. (2012). The Impact of Trade Integration on Business Cycle Synchronization for Mercosur Countries. European Journal of Comparative Economics. 9 (1), pp. 103-131, pp. 103-131. ISSN 1722-4667.
• HORVATH, J., RÁTFAI, A. (2004). Supply and Demand Shocks in Accession Countries to the Economic and Monetary Union. Journal of Comparative Economics. 32 (2), pp. 202-211. ISSN 0147-5967.
• HUŠEK, R. (2009). Aplikovaná ekonometrie: teorie a praxe. Praha: Oeconomica. ISBN 978-80-345-1623-3.
• HUŠEK, R., FORMÁNEK, T. (2011). Srovnání konvergence ekonomik ČR a vybraných zemí eurozóny na základě analýzy funkcí odezvy a nabídkových či poptávkových šoků. Politická ekonomie. 2011 (3), pp. 291-309. ISSN 0032-3233.
• KENEN, Peter B., (1969). The Theory of Optimum Currency Areas. In Monetary Problems of the International Economy. Chicago University Press, pp. 41-60.
• KRČÍLKOVÁ, M., ZÁPAL, J. (2012). Mundell in 3D, Synchronization of Supply and Demand Shocks among Sectors no Countries, with Application to CEEC. Empirica. 39 (3), pp. 407-434. ISSN 1573-6911.
• KRUGMAN, P. (1993). Lesson of Massachusetts for EMU. In Adjustment and Growth in the European Monetary Union. Cambridge: Cambridge University Press, pp. 241-261 ISBN 978-0521440196.
• KUČEROVÁ, Z. (2005). Teorie optimální měnové oblasti a možnosti její aplikace na země střední a východní Evropy. Studie Národohospodářského ústavu Josefa Hlávky 3/2005. ISBN 80-86729-18-4.
• LACINA, L. (2007). Měnová integrace: náklady a přínosy v měnové unii. Praha: C. H. Beck. ISBN 978-80-7179-560-5.
• LÜTKEPOHL, H., KRÄTZIG, M. (eds.). (2004). Applied Time Series Econometrics. Cambridge: Cambridge University Press. ISBN 978-0-521-54787-3.
• McKINNON, R. I. (1963). Optimum Currency Areas. American Economic Review. 53 (4), pp. 717-725. ISSN 0002-8282.
• MONGELLI, F. P. (2002). “New“ Views on the Optimum Currency Area Theory: What is EMU Telling us? European Central Bank Working Paper, no. 138, April 2002.
• MUNDELL, R. A. (1961). Theory of Optimum Currency Areas. American Economic Review.51 (4), pp. 657-665. ISSN 0002-8282.
• NUMA, M. (2011).The Feasibility of a Monetary Union in MERCOSUR. Michigan Journal of Business.4 (2), pp. 11-59. ISSN 1941-5745.
• Organisation for Economic Co-Operation and Development. (2014). OECD StatExtracts. Retrieved July 22, 2014, from http://stats.oecd.org/.

Identifiers

DOI

10.1515/revecp-2015-0018