Business cycle synchronisation in the Euro area: the case of small countries

Abstract

Business cycle synchronisation, Economic and Monetary Union, European Integration, E32, F15,

Business Cycle Synchronization in the EMU: Core vs. Periphery

“…Compared to the solid line, which represents our initial core-periphery country grouping, the group without Greece is actually more synchronized with the core, pointing to the particular decoupling of the Greek economy with the core countries, which was already taking place shortly after the introduction of the Euro. Our estimations support the findings of Gouveia and Correia (2008) who point out that the output co-movements of Greece were becoming weaker after 1997. If we exclude Italy from the periphery cluster, the desynchronization of the periphery with regards to the core is even more pronounced, suggesting that Italy enjoys on average a higher synchronization with the core than other peripheral countries.…”

“…The bulk of earlier studies that examined business cycle synchronization relies either on calculating a correlation measure over the entire time period or over nonoverlapping subperiods of time (Furceri and Karras, 2008;Gouveia and Correia, 2008). The observed time window is often set arbitrarily and the correlation coefficients are prone to potential outliers biasing the results.…”

Money-price relation in Malaysia: has it disappeared or strengthened?

“…Following the convention, we express all variables in natural logarithm. The cyclical correlations of money and prices are based on the ''deviation cycle'' concept normally applied in business cycle literature (see Gouveia and Correia 2008 and references therein). Thus, we differ from existing studies that rely on averages of money growth and inflation and accordingly provide a different perspective to the money-price relation.…”

Ten years EMU: an assessment of ten critical claims

“…This country has for many years had a business cycle not in sync with that of the average of the EMU countries (Artis, 2006;Howarth, 2006), even though in recent years the business cycle of that country has become more synchronised with that of the euro area. Some recent research suggests that being part of EMU may not further synchronise the business cycles of those countries in EMU (Gouveia and Correia, 2008). Be that as it may, so far, one cannot observe a problem with EMU countries not forming an OCA.…”