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Correlation of business cycles in the euro zone

Author Info

  • Gonçalves, Carlos Eduardo S.
  • Rodrigues, Mauro
  • Soares, Tiago

Abstract

In this short article we use a simple differences-in-differences technique to investigate whether bilateral correlation of business cycles increased more amongst members of the European Monetary Union (EMU) after the implementation of the Euro than amidst other OECD economies. We present evidence suggesting this to be the case.

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File URL: http://www.sciencedirect.com/science/article/pii/S0165-1765(08)00310-8
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 102 (2009)
Issue (Month): 1 (January)
Pages: 56-58

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Handle: RePEc:eee:ecolet:v:102:y:2009:i:1:p:56-58
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

Keywords: European Monetary Union Bilateral trade Economic cycles;

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  1. Baldwin, Richard E., 2006. "The euro’s trade effects," Working Paper Series 0594, European Central Bank.
  2. Eichengreen, Barry, 1993. "European Monetary Unification," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1321-57, September.
  3. Eichengreen, Barry, 1990. "Is Europe an Optimum Currency Area?," CEPR Discussion Papers 478, C.E.P.R. Discussion Papers.
  4. Kenneth Rogoff, 2001. "Why Not a Global Currency?," American Economic Review, American Economic Association, vol. 91(2), pages 243-247, May.
  5. Marianne Baxter & Michael A. Kouparitsas, 2004. "Determinants of business cycle comovement: a robust analysis," Working Paper Series WP-04-14, Federal Reserve Bank of Chicago.
  6. Clark, Todd E. & van Wincoop, Eric, 2001. "Borders and business cycles," Journal of International Economics, Elsevier, vol. 55(1), pages 59-85, October.
  7. Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-25, July.
  8. Andrew K. Rose, 2000. "One money, one market: the effect of common currencies on trade," Economic Policy, CEPR;CES;MSH, vol. 15(30), pages 7-46, 04.
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Cited by:

  1. Lee, Jim, 2012. "Measuring business cycle comovements in Europe: Evidence from a dynamic factor model with time-varying parameters," Economics Letters, Elsevier, vol. 115(3), pages 438-440.
  2. Bierbaumer-Polly, Jürgen & Huber, Peter & Huber, Petr, 2015. "The Impact of EU-Accession on Regional Business Cycle Synchronization and Sector Specialization," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113154, Verein für Socialpolitik / German Economic Association.
  3. Lee, Jim, 2009. "Evaluating monetary policy of the euro area with cross-country heterogeneity: Evidence from a New Keynesian model," Economic Systems, Elsevier, vol. 33(4), pages 325-343, December.
  4. Smimou, K. & Khallouli, W., 2015. "Does the Euro affect the dynamic relation between stock market liquidity and the business cycle?," Emerging Markets Review, Elsevier, vol. 25(C), pages 125-153.
  5. Pierre-Richard Agenor & Joshua Aizenman, 2008. "Capital Market Imperfections and the Theory of Optimum Currency Areas," NBER Working Papers 14088, National Bureau of Economic Research, Inc.
  6. Maria Jesús Delgado-Rodriguez & Sonia De lucas-Santos, 2013. "Testing cyclical convergence with the factor model in the Euro Area," Economics Bulletin, AccessEcon, vol. 33(3), pages 2245-2250.
  7. Styliani Christodoulopoulou, 2014. "The effect of currency unions on business cycle correlations: the EMU case," Empirica, Springer, vol. 41(2), pages 177-222, May.
  8. Bruzda, Joanna, 2011. "On some problems in discrete wavelet analysis of bivariate spectra with an application to business cycle synchronization in the euro zone," Economics Discussion Papers 2011-5, Kiel Institute for the World Economy (IfW).
  9. Radoslaw Kurach, 2011. "Eurozone stock returns co-movement: Some findings for portfolio managers and central bankers," Business and Economic Horizons (BEH), Prague Development Center, vol. 5(2), pages 1-12, April.

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