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Is the convergence of business cycles a global or regional issue? The UK, US and Euroland

  • Andrew Hughes Hallett
  • Christian Richter

    (Loughborough University, UK)

The identification of an European business cycle has been inconclusive. Yet cyclical convergence is the key consideration for those countries that wish to be members of the currency union (e.g. UK). In general, countries will vary in the components and characteristics that make up their cycles at any moment, as well as in the state of their cycle at each moment. To take this into account, we show here how to decompose a business cycle in a time-frequency framework; so that its components vary in importance and cyclical characteristics over time. We show, the inconclusive convergence results obtained so far appear because countries have some cycles in common-but diverge at others. Copyright © 2006 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal International Journal of Finance & Economics.

Volume (Year): 11 (2006)
Issue (Month): 3 ()
Pages: 177-194

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Handle: RePEc:ijf:ijfiec:v:11:y:2006:i:3:p:177-194
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  1. Andrew Hughes Hallett, Christian R Richter, 2001. "Spectral Analysis as a Tool for Financial Policy: An Analysis of the Short-End of the British Term Structure," Computing in Economics and Finance 2001 127, Society for Computational Economics.
  2. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
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  11. Jeffrey A. Frankel & Andrew K. Rose, 1996. "The Endogeneity of the Optimum Currency Area Criteria," NBER Working Papers 5700, National Bureau of Economic Research, Inc.
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