Assessing the optimality of euro adoption in Romania through shock correlations

The present paper is concerned with the prospect of euro adoption in Romania. The study starts from the relevant literature of the Optimum Currency Areas and identifies the most widely acknowledged meta property and methodological model for this purpose: the SVAR Blanchard and Quah decomposition for identifying the supply and demand shocks. Employing the indicated model and the most recent data, we are able extract and analyse the underlying shocks that hit 34 European economic entities in the period 1995-2019, while also taking into account two crucial structural changes for the Romanian economy – central bank independence and EU accession. After performing the pairwise correlations between Romania and the rest of the economic entities for both the supply and demand disturbances, we map them on a bidimensional graph. We discover that while there is relevant integration and connectedness that ensures relatively high correlations between supply shocks, the politically-motivated monetary and fiscal policy disturbances that created ample and hectic demand side movements, are a factor of great concern for the prospect of single currency adoption in this Eastern European country. The findings support the view that there is room for the conduct of macro policies to become more supportive to the process of euro adoption and that the respect of convergence criteria would help in this respect. To our knowledge, this is the first study performing pairwise shock correlations between Romania and many other European economic entities, while also isolating the effect of post 2005 structural changes.

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ACCESSION OF THE REPUBLIC OF CROATIA TO THE EUROPEAN ECONOMIC AND MONETARY UNION

Zbornik radova - Journal of Economy and Business ◽

10.46458/27121097.2017.si.166 ◽

2017 ◽

pp. 166-197

Keyword(s):

Interest Rates ◽

Monetary Union ◽

Financial Stability ◽

Monetary Integration ◽

Economic And Monetary Union ◽

Convergence Criteria ◽

Member States ◽

European Economic ◽

Euro Adoption ◽

Eu Member States

European monetary integration is a long-term process which ended with the establishment of the European Economic and Monetary union in 2002. Entering in the last stage of integration and adopting the euro is significant step for the economies of member states. To participate in the EMU, member states need to fulfil certain criteria, known as the convergence criteria or Maastricht criteria, which essentially comprise the fulfilment of the price stability, financial stability and stability of exchange rates and interest rates. Considering nominal criteria, member states must accomplish real convergence which means they need to reduce development lagging after other EU members. This paper examines effects of euro adoption on entire European Union including Republic of Croatia. The effects of adopting the euro on Croatian economy are explored from microeconomic and macroeconomic aspect. Regarding the variety of positive, but also negative effects on Croatian economy which are analysed in this paper, it can be concluded that adopting the euro has a positive effect on Croatian economy, assuming the convergence criteria achievement and initiation of the structural reforms that will reduce development disparities between Croatian economy and economies of the rest EU member states.

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Disentangling Labor Supply and Demand Shocks Using Spatial Wage Dispersion: The Case of Oil Price Shocks

SSRN Electronic Journal ◽

10.2139/ssrn.2384699 ◽

2013 ◽

Author(s):

Matthias Kehrig ◽

Nicolas Ziebarth

Keyword(s):

Labor Supply ◽

Supply And Demand ◽

Oil Price ◽

Oil Price Shocks ◽

Wage Dispersion ◽

Price Shocks ◽

Demand Shocks ◽

Supply And Demand Shocks ◽

Labor Supply And Demand

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Aggregate Supply and Demand Shocks and Asset Prices

SSRN Electronic Journal ◽

10.2139/ssrn.2930996 ◽

2017 ◽

Cited By ~ 1

Author(s):

Ray Ball ◽

Ayung Tseng

Keyword(s):

Asset Prices ◽

Supply And Demand ◽

Demand Shocks ◽

Aggregate Supply ◽

Supply And Demand Shocks

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The Dynamic Impacts of the COVID-19 Pandemic on Log Prices in China: An Analysis Based on the TVP-VAR Model

Forests ◽

10.3390/f12040449 ◽

2021 ◽

Vol 12 (4) ◽

pp. 449

Author(s):

Chenlu Tao ◽

Gang Diao ◽

Baodong Cheng

Keyword(s):

Exchange Rate ◽

Structural Changes ◽

Raw Materials ◽

Supply And Demand ◽

Oil Prices ◽

Control Measures ◽

Var Model ◽

Time Varying ◽

Wood Industry ◽

The Impact

China’s wood industry is vulnerable to the COVID-19 pandemic since wood raw materials and sales of products are dependent on the international market. This study seeks to explore the speed of log price recovery under different control measures, and to perhaps find a better way to respond to the pandemic. With the daily data, we utilized the time-varying parameter autoregressive (TVP-VAR) model, which can incorporate structural changes in emergencies into the model through time-varying parameters, to estimate the dynamic impact of the pandemic on log prices at different time points. We found that the impact of the pandemic on oil prices and Renminbi exchange rate is synchronized with the severity of the pandemic, and the ascending in the exchange rate would lead to an increase in log prices, while oil prices would not. Moreover, the impulse response in June converged faster than in February 2020. Thus, partial quarantine is effective. However, the pandemic’s impact on log prices is not consistent with changes of the pandemic. After the pandemic eased in June 2020, the impact of the pandemic on log prices remained increasing. This means that the COVID-19 pandemic has long-term influences on the wood industry, and the work resumption was not smooth, thus the imbalance between supply and demand should be resolved as soon as possible. Therefore, it is necessary to promote the development of the domestic wood market and realize a “dual circulation” strategy as the pandemic becomes a “new normal”.

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Segmented Housing Search

The American Economic Review ◽

10.1257/aer.20141772 ◽

2020 ◽

Vol 110 (3) ◽

pp. 720-759 ◽

Cited By ~ 9

Author(s):

Monika Piazzesi ◽

Martin Schneider ◽

Johannes Stroebel

Keyword(s):

San Francisco ◽

San Francisco Bay Area ◽

Supply And Demand ◽

Housing Markets ◽

Search Model ◽

Local Market ◽

Search Activity ◽

Bay Area ◽

Supply And Demand Shocks ◽

Housing Search

We study housing markets with multiple segments searched by heterogeneous clienteles. In the San Francisco Bay Area, search activity and inventory covary negatively across cities, but positively across market segments within cities. A quantitative search model shows how the endogenous flow of broad searchers to high-inventory segments within their search ranges induces a positive relationship between inventory and search activity across segments with a large common clientele. The prevalence of broad searchers shapes the response of housing markets to localized supply and demand shocks. Broad searchers help spread shocks across many segments and reduce their effect on local market activity. (JEL D83, R21, R31)

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