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European Business Cycle Synchronization: a Complex Network Perspective

Author

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  • Theophilos Papadimitriou

    (Department of Economics, Democritus University of Thrace, Greece)

  • Periklis Gogas

    (Department of Economics, Democritus University of Thrace, Greece; The Rimini Centre for Economic Analysis, Italy)

  • Georgios-Antonios Sarantitis

    (Department of Economics, Democritus University of Thrace, Greece)

Abstract

In this paper we attempt to provide empirical evidence on the issue of business cycle synchronization within Europe. The issue of business cycle convergence is important and very topical as it is a prerequisite for the implementation of an effective and successful monetary policy within a monetary union. We employ for the first time in this context (to the best of our knowledge) Complex Network metrics and we identify the corresponding Minimum Dominating Set of countries in terms of their GDP growth. An obvious focal point for our comparison of business cycle convergence is the adoption of a common currency (the euro) in 1999. By doing so, we reveal the evolution of GDP growth co-movement patterns of European economies before and after the introduction of the euro. The main findings from our empirical analysis provide evidence in favor of macroeconomic convergence after the introduction of the common currency.

Suggested Citation

  • Theophilos Papadimitriou & Periklis Gogas & Georgios-Antonios Sarantitis, 2014. "European Business Cycle Synchronization: a Complex Network Perspective," Working Paper series 33_14, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:33_14
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    References listed on IDEAS

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    1. Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-1025, July.
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    7. Aguiar-Conraria, LuI´s & Joana Soares, Maria, 2011. "Business cycle synchronization and the Euro: A wavelet analysis," Journal of Macroeconomics, Elsevier, vol. 33(3), pages 477-489, September.
    8. Christos S. Savva & Kyriakos C. Neanidis & Denise R. Osborn, 2010. "Business cycle synchronization of the euro area with the new and negotiating member countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 15(3), pages 288-306.
    9. Periklis Gogas, 2013. "Business cycle synchronisation in the European Union: The effect of the common currency," OECD Journal: Journal of Business Cycle Measurement and Analysis, OECD Publishing, Centre for International Research on Economic Tendency Surveys, vol. 2013(1), pages 1-14.
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    Cited by:

    1. Arnab Chakrabarti & Rituparna Sen, 2018. "Some Statistical Problems with High Dimensional Financial data," Papers 1808.02953, arXiv.org.

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