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The business cycle in Eurozone economies (1960 to 2009)


  • Ioanna Konstantakopoulou
  • Efthymios Tsionas


This article investigates the business cycles of Eurozone economies. We detect static and dynamic relationships between cyclical components of output, arising through the use of different filtering methods. This is achieved using for the first, correlations, and for the second, the Autoregressive Distributed Lag (ARDL) model proposed by Pesaran et al. (Pesaran-Shin-Smith, PSS, 2001). The evidence indicates that there is a core group of countries, comprising Germany, France, Belgium, the Netherlands and Austria, which are the most synchronized. These countries appear to form a common European cycle after the institutional changes in Europe, while countries such as Greece, Portugal, Luxembourg and Finland present no synchronization with the rest. In addition, the long run estimated coefficients confirm the positive relationships between the business cycles of countries such as Germany with those of the Netherlands, Austria, Belgium, Greece and Ireland. Furthermore, the French cycle with the Dutch, Luxembourgian, Belgian and Spanish cycles; the Belgian cycle with the cycles of all examined countries; the Portuguese cycle with the Greek cycle and finally the Spanish cycle with the Irish cycle. The cycles of most countries converge in the long run equilibrium path, while the speed of convergence is higher in France, Netherlands, Germany and Austria.

Suggested Citation

  • Ioanna Konstantakopoulou & Efthymios Tsionas, 2011. "The business cycle in Eurozone economies (1960 to 2009)," Applied Financial Economics, Taylor & Francis Journals, vol. 21(20), pages 1495-1513.
  • Handle: RePEc:taf:apfiec:v:21:y:2011:i:20:p:1495-1513
    DOI: 10.1080/09603107.2011.579060

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    References listed on IDEAS

    1. Canova, Fabio & Ciccarelli, Matteo & Ortega, Eva, 2012. "Do institutional changes affect business cycles? Evidence from Europe," Journal of Economic Dynamics and Control, Elsevier, vol. 36(10), pages 1520-1533.
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    Cited by:

    1. Atukeren, Erdal & Cevik, Emrah Ismail & Korkmaz, Turhan, 2015. "Downside Business Confidence Spillovers in Europe: Evidence from Causality-in-Risk Tests," MPRA Paper 76038, University Library of Munich, Germany.
    2. repec:eee:reveco:v:50:y:2017:i:c:p:75-84 is not listed on IDEAS
    3. Ansgar Belke & Clemens Domnick & Daniel Gros, 2017. "Business Cycle Synchronization in the EMU: Core vs. Periphery," Open Economies Review, Springer, vol. 28(5), pages 863-892, November.
    4. repec:eee:riibaf:v:42:y:2017:i:c:p:242-248 is not listed on IDEAS
    5. Anastasiou, Dimitrios, 2017. "The Interplay between Ex-post Credit Risk and the Cycles: Evidence from the Italian banks," MPRA Paper 79470, University Library of Munich, Germany.


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