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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, 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)
New Economics Papers: this item is included in nep-eec and nep-mac
Date: 2017-09-20
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Published in Available also in International Review of Financial Analysis 61 ; January ; 2019 http://urn.fi/URN:NBN:fi:bof-201905171195

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https://helda.helsinki.fi/bof/bitstream/123456789/14922/1/BoF_DP_1728.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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Persistent link: https://EconPapers.repec.org/RePEc:bof:bofrdp:2017_028

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