An Empirical Analysis of Romania’s Comovement with the Euro Zone

Theoretical and Applied Economics 01/2009; 11(540)(11(540)):41-50.
Source: RePEc


In light of adopting the euro in the near future, it is important to asses to which extent the Romanian business cycle evolves in a similar fashion with that of the euro zone. The present study is an empirical investigation of the degree of business cycle synchronization between Romania and the euro area, based on macroeconomic series that capture the cyclical features of the two economies. The results indicate that the most recent period, characterized by major economic and financial turmoil, has lead to an increase of the degree of comovement between of the Romanian economy with that of the euro area.

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    • "However, Atanas Damyanov and Galin Stefanov (2010) observed the synchronization of business cycles in Bulgaria and the European Union through two sub-periods, and concluded that a much higher degree of business cycle synchronization was recorded during the second sub-period than in the first. Nicolae Dardac and Elena Bojesteanu (2009) analysed the movements of business cycles in Romania and in the euro area countries. Their analysis favours the adoption of the euro. "

    Panoeconomicus 01/2013; 60(6):759-773. DOI:10.2298/PAN1306759O · 0.40 Impact Factor
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    ABSTRACT: This paper examines the degree of business cycles synchronization between Romania and the Euro area, by using Germany as a benchmark for the area economic cycle. The period of the study is 2000 – 2011, with a special emphasis on the recent economic and financial crisis. Using the Hodrick-Prescott filter, we findimportant,but decreasing correlations in times of crisis in the level of GDP.Furthermore, the analysis by GDP components reveals that private consumption remains the least correlated with the Euro area, while foreign trade is highly correlated and its synchronization even increased during the recent crisis.