@techreport{Dibooglu2001Sources,
abstract = {This paper examines the sources of fluctuations in inflation and output in two leading transitioneconomy
candidates for admission to the European Union (EU), Poland and Hungary. Using a
rational expectations, dynamic open economy aggregate supply- aggregate demand model, we
consider real oil price, supply, balance of payments, demand, and monetary disturbances
incorporating important features of transition economies such as balance of payments disturbances
and finite capital mobility. Evidence indicates that supply shocks explain a sizable portion of price
level movements in Hungary while demand shocks are dominant in price level movements in
Poland. Monetary shocks are an important source of output fluctuations in the short run in
Hungary suggesting nominal inertia. In Poland, real demand shocks affect output in the short run
(up to one year), while monetary shocks are negligible. Estimates of \textquotedblleft{}core inflation\textquotedblright{} based on
historical realizations of the shocks suggest that a major component of inflation has been demand
driven, \textquotedblleft{}core\textquotedblright{} inflation. Finally, policy implications of these findings regarding EU membership
are evaluated.},
address = {Bonn},
author = {Selahattin Dibooglu and Ali M. Kutan},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {E3; P2; O5; C5; 330; Business Cycles; Inflation; Transition Economies; Time Series Models; Inflation; Konjunktur; Schock; \"{U}bergangswirtschaft; Sch\"{a}tzung; VAR-Modell; U},
language = {eng},
number = {B 16-2001},
publisher = {ZEI},
title = {Sources of inflation and output fluctuations in Poland and Hungary: Implications for full membership in the European Union},
type = {ZEI working paper},
url = {http://hdl.handle.net/10419/39580},
year = {2001}
}
