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Business Cycle Synchronisation in a Currency Union: Taking Stock of the Evidence

Jarko Fidrmuc, Nauro Campos () and Iikka Korhonen

Annual Conference 2018 (Freiburg, Breisgau): Digital Economy from Verein für Socialpolitik / German Economic Association

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 cycles synchronisation coefficients and 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 differences-in-differences estimates suggest the euro accounted for approximately half of the observed increase in synchronisation.

Keywords: business cycles synchronisation; optimum currency areas; EMU; euro; meta-analys (search for similar items in EconPapers)
JEL-codes: E32 F42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-mac and nep-mon
Date: 2018
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https://www.econstor.eu/bitstream/10419/181608/1/VfS-2018-pid-13868.pdf (application/pdf)

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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:zbw:vfsc18:181608

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