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Business cycle synchronisation in a currency union: Taking stock of the evidence

Nauro Campos, Jarko Fidrmuc and Iikka Korhonen

No 28/2017, Bank of Finland Research Discussion Papers from Bank of Finland

Abstract: This paper offers a first 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 3,000 business cycle synchronisation coefficients as well as 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); (3) there is evidence of country-specific publication bias; (4) our difference-in-differences estimates suggest the euro accounted for approximately half of the observed increase in synchronisation.

JEL-codes: E32 F42 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://www.econstor.eu/bitstream/10419/212399/1/bof-rdp2017-028.pdf (application/pdf)

Related works:
Working Paper: Business Cycle Synchronisation in a Currency Union: Taking Stock of the Evidence (2018) Downloads
Working Paper: Business Cycle Synchronisation in a Currency Union: Taking Stock of the Evidence (2017) Downloads
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