New European Union members on their way to adopting the Euro: An analysis of macroeconomic disturbances

We identify aggregate demand and supply disturbances of several central and eastern European countries and compare them with the respective disturbances of France, Germany, and Italy which are the large economies of the euro zone. We also examine how output and prices of the various economies respond to these changes. We find that several central and eastern European countries (CEECs) still exhibit significant differences compared with the older member countries of the European Union (EU). However, some more advanced countries of the area already show remarkable similarities with the euro zone countries.