Are European Business Cycles Close Enough to be Just One?

Pérez-Quirós, Gabriel, Maximo Camacho and ,
Authors registered in the RePEc Author Service: Gabriel Perez Quiros

No 4824, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We propose a comprehensive methodology to characterize the business cycle comovements across European economies and some industrialized countries, always trying to ?let the data speak?. Out of this framework, we propose a novel method to show that there is no ?Euro economy? that acts as an attractor to the other economies of the area. We show that the relative comovements across EU economies are prior to the establishment of the Monetary Union. We are able to explain an important proportion of the distances across their business cycles using macro-variables related to the structure of the economy, to the directions of trade, and to the size of the public sector. Finally, we show that the distances across countries that belong to the European Union are smaller than the distances across newcomers.

Keywords: Business cycle synchronization; Economic integration; European union enlargement; Cluster analysis; Multidimensional scaling (search for similar items in EconPapers)
JEL-codes: C22 E32 F02 (search for similar items in EconPapers)
Date: 2005-01
New Economics Papers: this item is included in nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Are European business cycles close enough to be just one? (2006)
Working Paper: Are european business cycles close enough to be just one? (2004)
Working Paper: Are European business cycles close enough to be just one? (2004)
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