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Business-cycle synchronization in the EMU

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  • D. Furceri
  • G. Karras

Abstract

This article asks whether the business cycles of the EU countries have become more or less synchronized after the introduction of the euro. Our findings show that all countries in our EU sample are better synchronized with the EMU-wide economy in the post-EMU period than they were before the euro. We also show that this increase in synchronization is present in all components of aggregate demand, as well as two supply-side variables, but it is more pronounced in the trade components (imports and, particularly, exports). It is also shown that the increase in trade within the EMU area is at least partly responsible for the increase in cyclical synchronization.

Suggested Citation

  • D. Furceri & G. Karras, 2008. "Business-cycle synchronization in the EMU," Applied Economics, Taylor & Francis Journals, vol. 40(12), pages 1491-1501.
  • Handle: RePEc:taf:applec:v:40:y:2008:i:12:p:1491-1501
    DOI: 10.1080/00036840600843954
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    References listed on IDEAS

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    8. Artis, Michael J & Zhang, W, 1997. "International Business Cycles and the ERM: Is There a European Business Cycle?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 2(1), pages 1-16, January.
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