OCA INDEXES AND CONVERGENCE PROCESS IN EUROPE

JAKUB FRYDRYCH, STANISLAV BURIAN

Abstract


This paper evaluates the European monetary convergence for period 2001 and 2013. The main purpose of this contribution is the estimation of the so-called OCA index, which indicates the proximity of two economic areas. The paper is theoretically based mainly on the research of Bayoumi, Eichengreen (1997) and Horváth, Komárek (2003). Selection and calculation of variables precedes the econometric analysis, and those variables correspond to the basic characteristics of an optimum currency area. Although the estimated model fulfills the conditions of economic and econometric verifications, its explanatory capabilities are significantly reduced due to the limited set of input data. Results of the analysis point to relatively stable values of indices in the period, but their further examination of the development in time reveals a steady deterioration in the case of almost all economies. 

Keywords


EMU; OCA index; convergence; monetary policy; optimum currency area

JEL Codes


E42; F33

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References


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DOI: http://dx.doi.org/10.1515/saeb-2017-0012

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