.e., ten countries from Central and Eastern Europe (CEE) and three Western EU members. The analysis is based on a FAVAR model … with two blocks which exploits a large cross-country data set covering real activity variables, prices and financial … variables. An expansionary Euro area monetary policy shock raises production in most non-Euro area countries. Somewhat larger …

dollar shock, generalised impulse response function shocks and a global shock to risk aversion. Our results show that the way … depends crucially on the nature of the shock. This result is noteworthy given the apparent divergence in competitiveness …