Synchronization of Economic Sentiment Cycles in the Euro Area: a time-frequency analysis

Luís Aguiar-Conraria (), Manuel Martins and Maria Joana Soares ()
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Maria Joana Soares: Universidade do Minho, NIPE, and Departmento de Matemática

CEF.UP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: We use wavelet tools and Economic Sentiment Indicators to study the synchronization of economic cycles in the Euro Area. We assess the time-varying and frequency-varying pattern of business cycles synchronization in the Area and test the impact of the creation of the European Monetary Union in 1999. Among several results, we find that (a) the EMU is associated with a significant increase in synchronization of economic sentiment in the Euro Area; (b) the hard-peg of its currency to the Euro led to a comparable synchronization of Denmark's economic sentiment after 1999, differently from what happened in the case of the UK.

Keywords: Business cycle synchronization; Economic sentiment; Euro Area; Continuous wavelet transform; Wavelet coherency; Wavelet distance; Phase-difference. (search for similar items in EconPapers)
JEL-codes: C32 C49 E32 F44 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2011-10
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Citations: View citations in EconPapers (3)

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