How synchronized are central and east European economies with the euro area? Evidence from a structural factor model

Keywords : Dynamic panel models; Panel integration and cointegration; Heterogeneous parameters; Common correlated effects; Euro area countries; Fiscal policy reaction

(i) Within-country bivariate causality tests suggest that both the term spread and stock market returns contain useful information for approximately half the euro area countries,

The only parameters for which the prior distribution is essentially not updated are elasticity of labour supply in both countries and inertia of productivity shock in the euro

Using OECD estimates of the impact of a range of structural reforms on productivity and employment in euro area countries, simulations suggest that structural reforms could

After each country presents its Stability (euro-area countries) or Convergence (non-euro area countries) Programme and its National Reform Programme (later, in the

the inflation rates in twelve euro area countries through a factor model with time

3.1 Weaker impact of financial innovation in the euro area compared to non-euro area countries As pointed out by Filosa (1995), the conventional wisdom at the beginning of the 1980s

(2007) analyze two country groups – the new EU member states (NMS) 7 and the cur- rent euro area countries. The authors analyze statistical and structural measures of