Business cycle synchronization and the Euro: A wavelet analysis

Luís Aguiar-Conraria () and Maria Joana Soares

Journal of Macroeconomics, 2011, vol. 33, issue 3, 477-489

Abstract: We use wavelet analysis to study business cycle synchronization across the EU-15 and the Euro-12 countries. Based on the wavelet transform, we propose a metric to measure and test for business cycles synchronization. Several conclusions emerge. France and Germany form the core of the Euro land, being the most synchronized countries with the rest of Europe. Portugal, Greece, Ireland and Finland do not show statistically relevant degrees of synchronization with Europe. We also show that some countries (like Spain) have a French accent, while others have a German accent (e.g., Austria). Perhaps surprisingly, we find that the French business cycle has been leading the German business cycle as well as the rest of Europe. Among the countries that may, in the future, join the Euro, the Czech Republic seems the most promising candidate.

Keywords: Business; cycle; synchronization; European; Union; integration; Continuous; wavelet; transform; Wavelet; distance; matrix; Multidimensional; scaling (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (188)

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Working Paper: Business Cycle Synchronization and the Euro: a Wavelet Analysis (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:33:y:2011:i:3:p:477-489

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