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Business Cycle Synchronization in the EMU: Core vs. Periphery. CEPS Working Documents No. 427, 14 November 2016

Belke, Ansgar and Domnick, Clemens and Gros, Daniel. (2016) Business Cycle Synchronization in the EMU: Core vs. Periphery. CEPS Working Documents No. 427, 14 November 2016. [Working Paper]

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    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.

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    Item Type: Working Paper
    Uncontrolled Keywords: Business cycles, core-periphery, EMU, local polynomial regressions, synchronicity
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > EMU/EMS/euro
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Working Documents
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 16 Nov 2016 10:48
    Number of Pages: 46
    Last Modified: 29 Nov 2016 09:38
    URI: http://aei.pitt.edu/id/eprint/81690

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