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Common and spatial drivers in regional business cycles


  • Michael Artis
  • Christian Dreger
  • Konstantin Kholodilin


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 conver-gence does not seem to be an impediment to a common monetary policy.

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  • Michael Artis & Christian Dreger & Konstantin Kholodilin, 2009. "Common and spatial drivers in regional business cycles," Centre for Growth and Business Cycle Research Discussion Paper Series 118, Economics, The Univeristy of Manchester.
  • Handle: RePEc:man:cgbcrp:118

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    Cited by:

    1. Correia, L. & Gouveia, S., 2013. "Business cycle synchronisation at the regional level: evidence for the Portuguese regions," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 13(1), pages 91-104.
    2. Juergen Bierbaumer-Polly, 2012. "Regional and Sectoral Business Cycles - Key Features for the Austrian economy," EcoMod2012 4074, EcoMod.
    3. Ron Martin & Peter Sunley & Ben Gardiner & Peter Tyler, 2016. "How Regions React to Recessions: Resilience and the Role of Economic Structure," Regional Studies, Taylor & Francis Journals, vol. 50(4), pages 561-585, April.
    4. Hasan Engin Duran, 2014. "Short-Run Dynamics of Income Disparities and Regional Cycle Synchronization in the U.S," Growth and Change, Wiley Blackwell, vol. 45(2), pages 292-332, June.

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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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