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Business cycles in the euro area

Author

Listed:
  • Giannone, Domenico
  • Reichlin, Lucrezia
  • Lenza, Michele

Abstract

This paper shows that the EMU has not affected historical characteristics of member countries' business cycles and their cross-correlations. Member countries which had similar levels of GDP per-capita in the seventies have also experienced similar business cycles since then and no significant change associated with the EMU can be detected. For the other countries, volatility has been historically higher and this has not changed in the last ten years. We also find that the aggregate euro area per-capita GDP growth since 1999 has been lower than what could have been predicted on the basis of historical experience and US observed developments. The gap between US and euro area GDP per capita level has been 30% on average since 1970 and there is no sign of catching up or of further widening. JEL Classification: E32, E3, C5, F2, F43

Suggested Citation

  • Giannone, Domenico & Reichlin, Lucrezia & Lenza, Michele, 2009. "Business cycles in the euro area," Working Paper Series 1010, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20091010
    Note: 93468
    as

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    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp1010.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    euro area; European integration; European Monetary Union; international business cycle;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • F2 - International Economics - - International Factor Movements and International Business
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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