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Business Cycle Synchronization in the EMU: Core vs. Periphery

Ansgar Belke, Clemens Domnick and Daniel Gros

No 38, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: This paper examines business cycle synchronization in the European Monetary Union with a special focus on the core-periphery pattern in the aftermath of the crisis. Using a quarterly index for business cycle synchronization by Cerqueira (2013), our panel data estimates suggest that it is countries belonging to the core that are faced with increased synchronization among themselves after 2007Q4, whereas peripheral countries decreased synchronization with regards to the core, non-EMU countries and among themselves. Correlation coefficients and nonparametric local polynomial regressions corroborate these findings. The usual focus on co-movements and correlations might be misleading, however, since we also find large differences in the amplitude of national cycles. A strong common cycle can thus lead to large differences in cyclical positions even if national cycles are strongly correlated.

Keywords: Business cycles; core-periphery; EMU; local polynomial regressions; synchronicity (search for similar items in EconPapers)
JEL-codes: E32 F15 R23 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-eec, nep-mac and nep-opm
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https://www.econstor.eu/bitstream/10419/156158/1/GLO_DP_0038.pdf (application/pdf)

Related works:
Journal Article: Business Cycle Synchronization in the EMU: Core vs. Periphery (2017) Downloads
Working Paper: Business cycle synchronization in the EMU: Core vs. periphery (2016) Downloads
Working Paper: Business cycle synchronization in the EMU: Core vs. periphery (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:glodps:38

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