Determinants of Business Cycle Convergence in Euro Area. The Romanian Case
In the OCA theory, the higher economic openness and closer economic cooperation automatically lead to the convergence of business cycles. Krugman (1993) presented and alternative view on this issue. In his opinion, closer trade ties result in better allocation of resources and higher output speciali...
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General Association of Economists from Romania
2006-12-01
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doaj-d2915355c90e43f3b7cf0c2bc699dbe42020-11-24T22:19:24ZengGeneral Association of Economists from RomaniaTheoretical and Applied Economics1841-86782006-12-0110(505)10(505)4554Determinants of Business Cycle Convergence in Euro Area. The Romanian CaseMarius-Corneliu MarinasIn the OCA theory, the higher economic openness and closer economic cooperation automatically lead to the convergence of business cycles. Krugman (1993) presented and alternative view on this issue. In his opinion, closer trade ties result in better allocation of resources and higher output specialization of individual countries. As the industrial production in individual countries is becoming narrowly specialized, economies of such countries become more vulnerable and more predisposed to respond to shocks asymmetrically. The probability that shocks will be asymmetric or have asymmetric impact depends on the structure of the economy. If the structure of the economy is significantly different from the euro area, even the same shocks may have a different impact on a country and lead to asynchronous business cycle.http://www.ectap.ro/articole/168.pdfOCA theoryconvergence of business cycleseuro areaintra-industry tradeeconomic integration |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Marius-Corneliu Marinas |
spellingShingle |
Marius-Corneliu Marinas Determinants of Business Cycle Convergence in Euro Area. The Romanian Case Theoretical and Applied Economics OCA theory convergence of business cycles euro area intra-industry trade economic integration |
author_facet |
Marius-Corneliu Marinas |
author_sort |
Marius-Corneliu Marinas |
title |
Determinants of Business Cycle Convergence in Euro Area. The Romanian Case |
title_short |
Determinants of Business Cycle Convergence in Euro Area. The Romanian Case |
title_full |
Determinants of Business Cycle Convergence in Euro Area. The Romanian Case |
title_fullStr |
Determinants of Business Cycle Convergence in Euro Area. The Romanian Case |
title_full_unstemmed |
Determinants of Business Cycle Convergence in Euro Area. The Romanian Case |
title_sort |
determinants of business cycle convergence in euro area. the romanian case |
publisher |
General Association of Economists from Romania |
series |
Theoretical and Applied Economics |
issn |
1841-8678 |
publishDate |
2006-12-01 |
description |
In the OCA theory, the higher economic openness and closer economic cooperation automatically lead to the convergence of business cycles. Krugman (1993) presented and alternative view on this issue. In his opinion, closer trade ties result in better allocation of resources and higher output specialization of individual countries. As the industrial production in individual countries is becoming narrowly specialized, economies of such countries become more vulnerable and more predisposed to respond to shocks asymmetrically. The probability that shocks will be asymmetric or have asymmetric impact depends on the structure of the economy. If the structure of the economy is significantly different from the euro area, even the same shocks may have a different impact on a country and lead to asynchronous business cycle. |
topic |
OCA theory convergence of business cycles euro area intra-industry trade economic integration |
url |
http://www.ectap.ro/articole/168.pdf |
work_keys_str_mv |
AT mariuscorneliumarinas determinantsofbusinesscycleconvergenceineuroareatheromaniancase |
_version_ |
1725779440793812992 |