Abstract
In the context of the current enlargement of the European Monetary Union, this article aims to examine economic synchronization of Croatia with the Euro Area in the time-period domain. To this end, we calculate wavelet coherences and construct several wavelet indicators for real and nominal economic variables as well as variables related to economic sentiments. Comparing the results for Croatia with the benchmark economies, we find a relatively high level of synchronization of the real production and the producer prices in the lowest period band. Unemployment and the economic sentiment indicator both show a less intensive level of synchronization. Regarding unemployment, this may be due to structural factors outside the scope of the monetary policy. As for the economic sentiment indicator, there is evidence that it might get more synchronized after the introduction of the common currency. Therefore, this should not preclude Croatia from entering the European Monetary Union.
