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Are European business cycles close enough to be just one?

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Listed author(s):
  • Camacho, Maximo
  • Perez-Quiros, Gabriel
  • Saiz, Lorena

Abstract

We propose a comprehensive methodology to characterize the business cycle comovements across European economies and some industrialized countries, always trying to ‘let the data speak’. Out of this framework, we propose a novel method to show that there is no ‘Euro economy’ that acts as an attractor to the other economies of the area. We show that the relative comovements across EU economies are prior to the establishment of the Monetary Union. We are able to explain an important proportion of the distances across their business cycles using macro-variables related to the structure of the economy, to the directions of trade, and to the size of the public sector. Finally, we show that the distances across countries that belong to the European Union are smaller than the distances across newcomers.

(This abstract was borrowed from another version of this item.)

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Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 30 (2006)
Issue (Month): 9-10 ()
Pages: 1687-1706

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Handle: RePEc:eee:dyncon:v:30:y:2006:i:9-10:p:1687-1706
Contact details of provider: Web page: http://www.elsevier.com/locate/jedc

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Find related papers by JEL classification:
  • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
  • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
  • F02 - International Economics - - General - - - International Economic Order and Integration

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