Focus on European Economic Integration Q4/09

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• Focus on European Economic Integration 4/09 (PDF, 2.7 MB) December 2009.

• Focus on European Economic Integration Q4/09 (PDF, 2.7 MB) December 2009.

• Focus on European Economic Integration Q4/09 – Box 2: OeNB-BOFIT Outlook for CESEE Countries: The Region Is Reaching the Trough, a Gradual Recovery, Mainly Driven by External Demand, to Be Seen from 2010 Onwards (PDF, 228 kB) December 2009.

Studies and Analyses

• Developments in Selected CESEE Countries: Gradual Recovery in the Offing – Moderating External Imbalances, but Vulnerabilities Remain an Issue (PDF, 1.4 MB) en Dec 31, 2009, 12:00:00 AM

• Focus on European Economic Integration 4/09 – Box 1: Financial Market Developments in CESEE: Markets Are in the Process of Stabilizing as Global Risk Appetite Rebounds (PDF, 873 kB) en Dec 31, 2009, 12:00:00 AM

• Focus on European Economic Integration Q4/09 – Box 2: OeNB-BOFIT Outlook for CESEE Countries: The Region Is Reaching the Trough, a Gradual Recovery, Mainly Driven by External Demand, to Be Seen from 2010 Onwards (PDF, 228 kB) en Dec 31, 2009, 12:00:00 AM

• The Shock-Absorbing Capacity of the Flexible Exchange Rate in Poland (PDF, 826 kB) Stazka-Gawrysiak. Stazka-Gawrysiak – Focus on European Economic Integration Q4/09 In recent years, numerous studies have analyzed the sources of exchange rate fluctuations in the context of the shock-absorbing capacity of flexible exchange rates. This paper analyzes, within a Structural Vector Autoregressive (SVAR) framework, the role of the flexible exchange rate in Poland over the past decade. Our contribution to the existing literature is twofold: First, we expand the prevailing SVAR models to include a financial market shock, defined as a stochastic change in a country’s risk premium. This appears to be highly relevant in the face of the ongoing global financial crisis. Second, we analyze to what extent the crisis has affected the stabilizing capacity of the z?oty/euro exchange rate. We find that the exchange rate has been a shock-absorbing rather than a shock-propagating instrument. We also demonstrate that – in line with our expectations – the contribution of financial market disturbances to exchange rate volatility has increased during the current global crisis. en flexible exchange rate, euro area enlargement, financial crisis, SVAR F31, C32, F33 Dec 31, 2009, 12:00:00 AM

• CESEE Households amid the Financial Crisis: Euro Survey Shows Darkened Economic Sentiment and Changes in Savings Behavior (PDF, 262 kB) Dvorsky, Scheiber, Stix. Dvorsky, Scheiber, Stix – Focus on European Economic Integration Q4/09 This paper utilizes information from the OeNB Euro Survey, which was launched in 2007 and is conducted twice a year in ten CESEE countries. The most recent survey wave of May to June 2009 focused on the impact of the financial crisis on CESEE households. Results show, first, that the financial crisis is in fact severely felt throughout the region: Respondents’ assessment of the current economic situation has deteriorated, trust in the future stability of local currencies has diminished, and trust in banks has declined in almost all countries surveyed. Second, the analysis of aggregate monetary statistics reveals that households reacted by adjusting their portfolios immediately, but developments differ substantially across countries. Third, in countries with more persistent withdrawals, euro cash in circulation, surprisingly, has declined because households resorted to dissaving to compensate for decreasing income. The authors conclude that although a massive shock has hit the region, no dramatic changes in the overall degree of euroization have occurred. This subdued impact is likely to signal that past stabilization efforts have paid off and that the economic and monetary policy measures taken in the course of t the crisis were successful. en Euroization, global financial crisis, portfolio decision, trust, survey data, Central, Eastern and Southeastern Europe D14, E41, E50, G11 Dec 31, 2009, 12:00:00 AM

• Simple but Effective: The OeNB’s Forecasting Model for Selected CESEE Countries (PDF, 515 kB) Cuaresma, Feldkircher, Slacík, Wörz. Crespo Cuaresma, Feldkircher, Slacík, Wörz – Focus on European Economic Integration Q4/09 This paper describes the new forecasting tool used by the Oesterreichische Nationalbank (OeNB) to derive near-term forecasts for GDP and imports for five Central, Eastern and Southeastern European (CESEE) countries, namely Bulgaria, Croatia, the Czech Republic, Hungary and Poland. An error correction (EC) model is estimated separately for each country by means of seemingly unrelated regressions. Each country-specific macromodel consists of six structural cointegration relationships that model private consumption, investment, exports, imports, the nominal exchange rate and the nominal interest rate using an augmented Taylor rule. Using quarterly data as of the first quarter of 1995, we produce forecasts for GDP and imports with this model. Notwithstanding the dynamic nature of the transition process as well as the limited availability and, in some cases, quality of data, our structural model for the CESEE countries performs fairly well and we expect further gains in forecasting accuracy as more data become available and their quality improves. en Error correction model, model validation, Central, Eastern and Southeastern Europe, C32, C53, E17 Dec 31, 2009, 12:00:00 AM

• The Euro’s Contribution to Economic Stability in CESEE (PDF, 147 kB) Breitenfellner – Focus on European Economic Integration Q4/09 en Dec 31, 2009, 12:00:00 AM

• 65th East Jour Fixe: Credit Default Swaps – Blessing or Curse? (PDF, 129 kB) Gardó and Lahnsteiner – Focus on European Economic Integration Q4/09 en Dec 31, 2009, 12:00:00 AM

• IMF Outlook for Europe: Securing Recovery (PDF, 102 kB) Lerner – Focus on European Economic Integration Q4/09 en Dec 31, 2009, 12:00:00 AM

• Olga Radzyner Award Winners 2009 (PDF, 94 kB) Focus on European Economic Integration Q4/09 en Dec 31, 2009, 12:00:00 AM

• Selected Abstracts (PDF, 60 kB) Focus on European Economic Integration Q4/09 en Dec 31, 2009, 12:00:00 AM

• Statistical Annex (PDF, 117 kB) Focus on European Economic Integration Q4/09 en Dec 31, 2009, 12:00:00 AM