Abstract
The paper compares vulnerability to crises of the Czech Republic and Slovakia, which had operated as Czechoslovakia prior to 1993. In 2009, Slovakia adopted the euro, while the Czech Republic retained its koruna. The main research question is if the introduction of the euro made Slovakia more vulnerable to pan-European crisis. The paper concentrates on two episodes: the Greek (pan-European) and Hungarian (regional) turmoil. The level of the country risk is measured through volatility of bond-spreads. From DCC-copula model the authors derive time-varying probability of crisis transmission and dynamic correlations. The main findings of the paper are: (i) Euro adoption did not make Slovakia more vulnerable to the pan-European problems. (ii) The country is still identified by investors as an emerging Central-European region, rather than a country of the Eurozone.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
