Cross-border production chains and business cycle co-movement between Central and Eastern European countries and euro area member states

Plamen Iossifov
Authors registered in the RePEc Author Service: Пламен Йосифов

No 1628, Working Paper Series from European Central Bank

Abstract: In this paper, we highlight the role of global value chains in the synchronization of economic activity between countries in Central and Eastern Europe (CEE) and the euro area. We start off by demonstrating that the degree of synchronization of the business cycles of CEE countries and their main trade partners from the euro area has increased in recent years. We next show that the cyclical fluctuations of GDP in CEE countries are strongly influenced by pro-cyclical movements of changes in inventories. We then present evidence of the importance of cross border production chains for the economies of CEE countries. We build on these findings to show that the propagation of changes in demand for imports along global supply chains JEL Classification: E32, F44, F62, O52

Keywords: business cycle; CEE; Central and Eastern European countries; cross-border production chains; global value chains; inventories (search for similar items in EconPapers)
Date: 2014-01
New Economics Papers: this item is included in nep-bec, nep-eec, nep-int, nep-mac and nep-tra
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20141628

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