The purpose of this thesis is to identify a general model to forecast GDP growth for the Baltic States, Estonia, Latvia and Lithuania. If the model provides reliable results for these states, then the model should be able to forecast GDP growth for other countries of interest. Forecasts are made by using a reduced vector autoregressive (VAR) model. The VAR models make use of past values of Gross Domestic Product-Inflation-Unemployment as explanatory variables. The performed forecasts have provided good results for horizons up to t+8. The forecasts for 2009 (t+12) are in line with those of several other actors. It is reasonable to assume that some of the forecasts for t+16 have reliable results. The Lithuanian forecast show a fall in GDP with 12.51 per cent in 2009 and a GDP growth of 4.23 per cent in 2010. The forecast for Estonia show that the GDP will decrease with 1.49 per cent in 2009 and 12.72 per cent in 2010. Finally the forecast for Latvia show a fall in GDP of 3.1 per cent in 2009 and 18 per cent in 2010. From the findings it is possible to conclude that the model provided reliable estimates of future levels of GDP for the Baltic States and the benchmark countries. This indicates that the model should be applicable on other countries of interest.

The purpose of this paper is to study whether Sweden or Finland was initially better suited for the euro, and whether Sweden has benefited from remaining outside the third step of the European Monetary Union as opposed to Finland.  The analysis is based on the optimum currency area theory.  The findings show that Sweden initially was better suited for euro adoption than Finland, but the ECB’s monetary policy has suite Finland quite well.  However, Sweden appears to have benefited from remaining outside the euro.

Il presente lavoro raccoglie 4 contributi sul tema dei differenziali sui tassi di interesse esistenti tra i membri dell'unione monetaria europea. / I investigate the determinants of sovereign yield spreads in EMU.

The purpose of this paper is to investigate how the changes in trade values are affected by the implementation of the euro currency. We study the EU members, including 11 EMU members and 3 non-EMU members (Sweden, Denmark and the United Kingdom). The empirical analysis is conducted by using a modified version of the standard gravity model. Our core findings can be summarized into two parts. First, the euro effect on trade which is estimated by the euro-dummy coefficient reflects an adverse influence by the euro creation on trade values for the first two years of the implementation on all our sample countries. It leads us to a conclusion that there is no significant improvement of trade in the year of implementation. These results do not change when a time trend variable is added to evaluate the robustness of the model. Our primary interpretation is that the euro creation does not have an immediate impact on trade but it is rather gradual as countries need time to adapt to a new currency. It is connected to our second finding that the negative influence of the euro implementation is not permanent but eventually initiates positive outcomes on trade values over time, thus concluding that the euro implementation has had gradual impact on both EMU and non-EMU members.

This paper tests for the Euro zone the hypothesis put forward by Sapir and Sekkat (1999) that synchronizing elections might improve welfare. After identifying a political budget cycle in the Euro zone we build a politico-macroeconomic model and simulate the effects of adopting a common election day in the 12 Euro zone member states. The results support most of the theoretical predictions by Sapir-Sekkat: (i) Synchronizing the elections could enhance GDP growth, reduce unemployment, but leads to increased inflation and in some countries to a deterioration of the budget; higher inflation forces ECB to monetary restrictions. (ii) If the synchronization happens asymmetrically - either only in the large or only in the small Euro zone countries - the result depends on the size of the spillovers. (iii) As anticipated in Sapir -Sekkat a common election day is a further step towards the desired "European business cycle", however, at the cost of increasing its amplitude. Harmonizing elections is another method of policy coordination. Whether this leads to higher welfare is a matter of weighting the different macroeconomic outcomes and it also depends on the model applied. (author's abstract) / Series: EI Working Papers / Europainstitut

Bakgrund och problem: I och med globaliseringen befinner sig världen i en mer och mer integrerad tillvaro där våra tidigare separerade ekonomier är mer och mer sammankopplade. Den senaste finanskrisen som startade i USA har haft kraftigåterverkan på den europeiska ekonomin. Vissa europeiska stater har dock klarat sig bättre än andra vilket får oss att fundera över varför och om fallet verkligen är sådant. Syfte: Syftet med arbetet är att undersöka om den gemensamma valutan som vissa stater i Europa har implementerat har någon betydelse i dess förmåga att hantera och bekämpa den senaste finanskrisen 2008. Metod: Arbetet har utförts med hjälp av ett kvantitativt tillvägagångsätt då vi behandlar utvalda europeiska börsindex för att beräkna nödvändiga faktorer. Dessa faktorer används sedan i utvalda modeller och teorier för att kunna analyseras på ett tillförlitligt sätt. Vi har delat in börserna efter statens valuta och placerat dessa i två portföljer, portfölj 1 och portfölj 2. Portfölj 1 är de stater som är medlemmar i EMU och således har euron som valuta och portfölj 2 är de stater som står utanför valutasamarbetet. Analys & slutsats: I empirin finner vi skillnader mellan portföljerna till fördel för portfölj 2 (icke EMU-länder). Vi kan dock inte dra några konkreta slutsatser av detta då det är fler faktorer än börsutvecklingensom ligger bakom den ekonomiska utvecklingen. Det anmärkningsvärda är ändå att skillnader existerar inom dessa två grupper.

The aim of this thesis is to evaluate the sufficiency of Turkey for joining the Economic and Monetary Union of the European Union (EMU) in terms of similarity and convergence. The study has been conducted in a comparative and descriptive way. First, the similarity and convergence of Turkey to some selected countries are examined with respect to her macroeconomic position. When taking EMU as a benchmark and comparing the convergence of Turkey with the convergence of some of the countries and country groups, it is found that the macroeconomic deficiencies of Turkey are not in an extent that characterizes Turkey as a totally insufficient candidate for EMU. Next, whether there are similarity and convergence in trade structures of Turkey and the European Union of 15 member states (EU15) for the period between 1995 and 2008 is inspected. The results indicated that Turkish export structure is clearly converging to the export structure of EU15 in the course of time. In general, findings of the thesis indicated that there is mostly a continuous convergence in all of the indicators considered but still Turkey does not meet all of the convergence criteria, perfectly. Therefore, as a result of the examinations, some suggestions have been made which would facilitate EMU membership of Turkey.

This dissertation studies the Economic and Monetary Union (EMU) and its effects on foreign exchange markets and corporate cash holdings. These two potential effects are examined in the dissertation in two separate essays. The first essay examines the validity of the purchasing power parity (PPP) condition during three distinct exchange rate regimes (floating-rate, target-zone arrangement, and fixed-rate or common currency) from January 1973 through January 2004. My results support PPP, but I find that PPP during the common currency regime holds in fewer EMU countries than during the alternative exchange rate regimes. In addition, PPP between currency blocs holds for all countries examined during the first two regimes, but deteriorates after the introduction of the euro for the EMU countries as opposed to the non-EMU countries. I do not obtain strong evidence supporting PPP for the EMU countries since the euro adoption, but the faster mean reversion I observe in the few EMU countries where PPP does hold, may signal higher market efficiency and economic integration in the future. The second essay investigates corporate liquidity (cash holdings of firms) from 15 European Union (EU) countries [12 Economic and Monetary Union (EMU) countriesthat adopted the euro, and 3 non-EMU countries] from 1993 to 2002 using a dynamic panel data model. My main contributions to the corporate liquidity literature are fourfold. First, I provide evidence that creditor rights also affect corporate liquidity and their effect is more consistent than that of shareholder rights. Second, I show that the recent formation of EMU affects corporate liquidity. Debt and net working capital are better substitutes for cash in EMU countries than non-EMU countries. The adoption of a common currency reduces cash holdings in EMU countries. Third, my results suggest that agency theory plays an important role in explaining corporate liquidity. In particular, the agency view explains corporate liquidity better for EMU firms, probably because of an enhanced capital market integration that weakens the transaction and precautionary motives of holding cash. Fourth, I show that dealing with the endogeneity problem in corporate liquidity studies is important.

Darbe apžvelgiama bendrų pinigų Europoje svarba bei pateikiama ECB funkcijų EPS analizė. Apžvelgiamas ECB ir LB bendradarbiavimas. Remiantis ECB pranešimais apie konvergenciją pateikiama Lietuvos bei Slovėnijos makroekonominių rodiklių palyginamoji analizė bei remiantis Lietuvos finansų ministerijos ir EK parengtais makroekonominių rodiklių prognozių analizė. Išryškinamos pagrindinės ekonomikos problemos. / The importance of common currency in Europe is surveyed and analysis of ECB functions is the EMU is made. The paper also contains an analysis of ECB and LB's cooperation. According to the data given in Convergence Reports a comparable analysis of Lihuania and Slovenia's macroeconomic indexes is performed. According to the data prepared by the Ministry of Finance of Lithuania and the European Commission an analysis of the macroeconomic indexes forecasts is made. Main economic problems in Lithuania are highlighted.

There is a pressing need for better assessment of bone strength as current clinical tools do not directly measure bone mechanical properties, but offer only surrogate measures of bone strength. We conducted an ex-vivo study of emu bones to examine how two investigative devices, hr-pQCT and MRTA, compare to current clinical tools (DXA and QUS) in predicting true bone mechanical properties. We found that hr-pQCT parameters were able to assess bone strength as well as DXA and better than QUS, while MRTA was able to predict bone strength well in low-density but not high-density bones. Our results suggest that both hr-pQCT, which has the unique ability to specifically assess the various determinants of bone strength, and MRTA, which measures a bone mechanical property (stiffness), have great potential for use as clinical tools that can assess various components of bone strength not measured by current devices.