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Business cycle synchronisation and currency unions: A review of the econometric evidence using meta-analysis

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  • Campos, Nauro F.
  • Fidrmuc, Jarko
  • Korhonen, Iikka

Abstract

This paper offers a systematic evaluation of the evidence on the effects of currency unions on the synchronisation of economic activity. Focusing on Europe, we construct a database of about 3000 business cycles synchronisation coefficients including their design and estimation characteristics. We find that: (1) synchronisation increased from about 0.4 before the introduction of the euro in 1999 to 0.6 afterwards; (2) this increase occurred in both euro and non-euro countries (larger in former); and (3) there is evidence of country-specific publication bias.

Suggested Citation

  • Campos, Nauro F. & Fidrmuc, Jarko & Korhonen, Iikka, 2019. "Business cycle synchronisation and currency unions: A review of the econometric evidence using meta-analysis," International Review of Financial Analysis, Elsevier, vol. 61(C), pages 274-283.
    • Handle: RePEc:eee:finana:v:61:y:2019:i:c:p:274-283
    DOI: 10.1016/j.irfa.2018.11.012
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    More about this item

    Keywords

    Business cycles synchronisation; Optimum currency areas; EMU; Euro; Meta-analysis;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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