This paper uses the VAR methodology to analyse the effects of European Central Bank monetary policy shocks and euro area output and inflation shocks on the European Union member states from Central and Eastern Europe. First, we look at the strength of effects of identified euro area monetary policy shocks and compare the influence with the one of the domestic policy shocks. Next, we turn to analysis of output and inflation responses to euro area output and inflation shocks relative to aggregate euro area reaction. We provide implications for each country monetary policy decision process and draw conclusions concerning readiness for euro adoption, both from monetary and real economy point of view.

This paper investigates the stationarity of East Asian currencies (ASEAN 6) by using a unit root test and cointegration test. We examine whether the Asian monetary unit (AMU) deviation indicators adjusted by the Balassa–Samuelson effect of ASEAN 6 are stationary over the short term by carrying out a unit root test. We also assess whether cointegration relationships exist over the long term by carrying out a cointegration test. Based on an empirical analysis of 57 combinations, we cannot find any combinations show a significant result. Based on our results, it is clear that exchange rate fluctuations among the East Asian currencies respond to each other asymmetrically and that the issue of exchange rate misalignment needs to be dealt with immediately.