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Common and spatial drivers in regional business cycles

  • Michael Artis
  • Christian Dreger
  • Konstantin Kholodilinf

We examine real business cycle convergence for 41 euro area regions and 48 US states. Results obtained by a panel model with spatial correlation indicate that the relevance of common business cycle factors is rather stable over the past two decades in the euro area and the US. Ongoing business cycle convergence often detected in cross-country data is not confirmed at the regional level. The degree of synchronization across the euro area is similar to that to be found for the US states. Thus, the lack of convergence does not seem to be an impediment to a common monetary policy.

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File URL: http://eprints.lse.ac.uk/33213/
File Function: Open access version.
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Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 33213.

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Length: 16 pages
Date of creation: Apr 2009
Date of revision:
Handle: RePEc:ehl:lserod:33213
Contact details of provider: Postal: LSE Library Portugal Street London, WC2A 2HD, U.K.
Phone: +44 (020) 7405 7686
Web page: http://www.lse.ac.uk/

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  17. Michael S. Hanson & Erik Hurst & Ki Young Park, 2006. "Does Monetary Policy Help Least Those Who Need It Most?," Wesleyan Economics Working Papers 2006-006, Wesleyan University, Department of Economics.
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