Updating empirical evidence on business cycles synchronization between CEECs and euro area : how important is the recent period

Our findings indicate that the former split of CEECs in terms of business cycles synchronization with the euro area does not hold as soon as the recent period is taken into account. While Slovenia and Poland continue to appear as suitable EMU members due to their high – and growing – GDP co-movements with the euro area, Hungary does no longer belong to this group. By contrast, Slovakia has presented for few years a high degree of business cycle synchronization with the euro area – comparable to the one of Slovenia – which has not been captured by previous empirical studies. Our findings show also that Lithuania does not participate in the general trend of higher GDP co-movements with the euro area. Furthermore, an analysis by GDP components reveals that internal components rather than external ones predominantly account for growing GDP synchronization between CEECs and the euro area.