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LINKAGES BETWEEN THE EUROZONE AND THE SOUTH-EASTERN EUROPEAN COUNTRIES: A GLOBAL VAR ANALYSIS

 

Minoas Koukouritakis

University of Crete

 

Athanasios P. Papadopoulos

University of Crete

 

Andreas Yannopoulos

University of Crete

 

Abstract

In the present paper we assess the impact of the Eurozone’s economic policies on specific South-Eastern European countries, namely Bulgaria, Croatia, Cyprus, Greece, Romania, Slovenia and Turkey. Since these countries are connected to the EU or the Eurozone and economic interdependence among them is continuously evolving, we implemented a Global VAR model. Our results indicate that all sample countries, except Turkey, react in a similar manner to changes (a) in the macroeconomic policies of the Eurozone, and (b) in the nominal exchange rate of the euro against the US dollar. There is evidence of linkages among the EU or Eurozone members of the region, and between each of them and the Eurozone.

 

JEL Classification: E43, F15, F42

 

Keywords: Monetary Transmission, Global VAR Model, Weak Exogeneity, Impact Elasticities, Generalised Impulse Responses.

 

Acknowledgement: This study was conducted under the Bank of Greece’s programme of cooperation with Greek universities. The authors would like to thank Heather Gibson, Stephen G. Hall and George S. Tavlas for their constructive suggestions and helpful comments that improved the quality of the paper. The views expressed do not necessarily reflect those of the Bank of Greece.

 

 

Correspondence.

Athanasios P. Papadopoulos

Department of Economics,

University of Crete, University Campus,

Rethymno 74100, Greece.

Tel: +302831077418

fax: +302831077404

e-mail: appapa@uoc.gr 

 


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