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Business cycles in the euro area

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  • Giannone, Domenico
  • Lenza, Michele
  • Reichlin, Lucrezia
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    Abstract

    This paper shows that the EMU has not affected historical characteristics of member countries’ business cycles and their cross-correlations. Member countries which had similar levels of GDP per-capita in the seventies have also experienced similar business cycles since then and no significant change associated with the EMU can be detected. For the other countries, volatility has been historically higher and this has not changed in the last ten years. We also find that the aggregate euro area per-capita GDP growth since 1999 has been lower than what could have been predicted on the basis of historical experience and US observed developments. The gap between US and euro area GDP per capita level has been 30% on average since 1970 and there is no sign of catching up or of further widening. JEL Classification: E32, E33, C5, F2, F43.

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    Bibliographic Info

    Paper provided by European Central Bank in its series Working Paper Series with number 1010.

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    Date of creation: Feb 2009
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    Handle: RePEc:ecb:ecbwps:20091010

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    Related research

    Keywords: euro area; European Integration; European Monetary Union; international business cycle;

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    Cited by:
    1. Zeno Enders & Philip Jung & Gernot J. Müller, 2009. "Has the Euro changed the Business Cycle?," Bonn Econ Discussion Papers bgse6_2009, University of Bonn, Germany.
    2. Julius Agbor Agbor, 2013. "The Future of the CEMAC CFA FRANC," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 1(1), pages 1-17.

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