A meta-analysis of business cycle correlation between the euro area and CEECs : What do we know - and who cares?

Abstract

We review the literature on business-cycle correlation between the euro area and Central and Eastern European countries (CEECs), a topic that has gained attention in recent years as new EU entrants prepare for participation in the monetary union.Our meta-analysis suggests several CEECs already have comparably high correlation with the euro area business cycle.We also find that estimation methodologies can have a significant effect on correlation coefficients.While central bankers are more conservative in their estimates, we find no evidence of a geographical bias in the studies.JEL-Numbers: C42, E32, F15, F31.Key words: monetary union, optimum currency area, business cycles, meta- analysis.