Synchronization of the Business Cycle of Slovakia and the Eurozone through the Industrial Production between the Years 1999-2014

The bachelor thesis treats the synchronization of the business cycle of Slovakia and the eurozone through the industrial production between the years 1999-2014. The aim of the thesis is to verify or to falsify the hypothesis whether there is a synchronization of the business cycles of chosen economies and subsequently characterize this synchronization. The thesis is divided into several parts that intersect themselves. The first one summarizes the actual state of knowledge in the area of the economic cycles. The second chapter offers summary analysis of the respective phases of the business cycle that the Slovak republic and the eurozone noted in their modern history. In the next part the mutual synchronization is empirically evaluated by the correlation coefficient of the cyclical component of time series of the industrial production index of the two selected economies and then the time series are divided into three periods which record the development of the synchronization of the cyclic fluctuations in time. Related to this, the delays of the Slovak economic cycle are tested in comparison with the European cycle. To check the synchronization, the suitable vector autoregressive model is selected and confirms the defined hypothesis and shows that not only does the Slovak economic cycle depend on the economic cycle of the eurozone, but it is developing in the same way and the Slovak economy is adjusting to the European one. At the end of the thesis the theoretical and simulated outputs are summed up in the short discussion.