Economics at your fingertips  

The core‒periphery pattern of European business cycles: A fuzzy clustering approach

Markus Ahlborn and Marcus Wortmann

Journal of Macroeconomics, 2018, vol. 55, issue C, 12-27

Abstract: The literature on business cycle synchronization in Europe frequently presumes an alleged ‘core‒periphery’ pattern without providing empirical verification of the underlying cyclical (dis)similarities or the supposed but unobservable ‘European business cycle(s)’. To provide a data-based country group analysis, we apply a fuzzy clustering approach to quarterly output gap series of 27 European countries over the period 1996‒2015. Our results confirm the existence of a persistent core cluster as opposed to clusters on the Eastern and Southern European peripheries, highlighting the inadequate composition of the euro area (EA). Moreover, we find that Germany's business cycle is not a suitable substitute for the core. By analyzing the relation between the identified ‘European core business cycle’ and the peripheral cycles over time, we show diverging patterns for the southern periphery after the financial crisis as well as convergence for the eastern periphery.

Keywords: Business cycles; Core‒periphery; Euro area; Fuzzy cluster analysis (search for similar items in EconPapers)
JEL-codes: C38 E32 F15 F45 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos

More articles in Journal of Macroeconomics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-11-16
Handle: RePEc:eee:jmacro:v:55:y:2018:i:c:p:12-27