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Business Cycle Synchronization and Insurance Mechanisms in the EU

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Author Info

  • António Afonso
  • Davide Furceri

Abstract

In this paper we provide a positive exercise on past business-cycle correlations and risk sharing in the European Union, and on the ability of insurance mechanisms and fiscal policies to smooth income fluctuations. The results suggest in particular that while some of the new Member States have well synchronized business cycles, for some of the other countries, business cycles are not yet well synchronized with the euro area’s business cycle, and risk-sharing mechanisms may not provide enough insurance against shocks.

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File URL: http://pascal.iseg.utl.pt/~depeco/wp/wp262007.pdf
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Bibliographic Info

Paper provided by ISEG - School of Economics and Management, Department of Economics, University of Lisbon in its series Working Papers Department of Economics with number 2007/26.

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Date of creation: 2007
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Handle: RePEc:ise:isegwp:wp262007

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Postal: Department of Economics, ISEG - School of Economics and Management, University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Web page: https://aquila1.iseg.ulisboa.pt/aquila/departamentos/EC

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Keywords: EU; Optimum Currency Areas; Business Cycle Synchronization; Insurance Mechanisms.;

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References

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Citations

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Cited by:
  1. Balli, Faruk & Basher, Syed Abul & Ozer-Balli, Hatice, 2011. "Income insurance and the determinants of income insurance via foreign asset revenues and foreign liability payments," MPRA Paper 29364, University Library of Munich, Germany.
  2. Afonso, António & Furceri, Davide, 2008. "Government size, composition, volatility and economic growth," Working Paper Series 0849, European Central Bank.
  3. Balli, Faruk & Basher, Syed Abul & Balli, Hatice Ozer, 2013. "International income risk-sharing and the global financial crisis of 2008–2009," Journal of Banking & Finance, Elsevier, vol. 37(7), pages 2303-2313.
  4. Salá Rios, Mercé & Farré Perdiguer, Mariona & Torres Solé, Teresa, 2011. "El ciclo económico de Cataluña. Un análisis de la simetría respecto a España y a la UEM/Catalonia's Business Cycle. An Analysis of the Symmetry in Relation to Spain and the EMU," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 29, pages 913 (24 pá, Diciembre.
  5. Andrzej Toroj, 2009. "Macroeconomic adjustment and heterogeneity in the euro area," National Bank of Poland Working Papers 54, National Bank of Poland, Economic Institute.
  6. Dobrescu, Emilian, 2012. "Restatement of the I-O Coefficient Stability Problem," MPRA Paper 48567, University Library of Munich, Germany.
  7. Dobrescu, Emilian, 2013. "Restatement of the I-O Coefficient Stability Problem," Working Papers of Macroeconomic Modelling Seminar 132601, Institute for Economic Forecasting.

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