Modelling the accession countries: An analysis of symmetric and asymmetric structural shocks and spillover effects in relation to the EU

This paper investigates symmetric and asymmetric structural shocks in the Accession countries and discusses spillovers to and from the rest of the European Union. We present and use structural macro models of Poland, Hungary, the Czech Republic, Slovenia and Estonia. These estimated models allow for endogenous growth, and they have been incorporated into an existing global econometric model (NiGEM). This allows us to analyse the impacts of developments in other economies as well as impacts on them. We focus on impacts on existing EU members as well as the candidate countries. The changing nature of structural shocks is discussed, and we undertake comparisons between shock structures in the Euro Area, the rest of the EU and the Accession Countries. We also discuss spillovers from policy induced shocks in both sets of countries.

Presented at CEPR-EABCN Conference on Business Cycle and Acceding Countries. Vienna.