Will business cycles in the euro area converge? A critical survey of empirical research

Jakob de Haan*, Robert Inklaar, Richard Jong-A-Pin

*Corresponding author for this work

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Abstract

This survey of business cycle synchronization in the European monetary union focuses on two issues: have business cycles become more similar, and which factors drive business cycle synchronization. We conclude that business cycles in the euro area have gone through periods of both convergence and divergence. Still, there is quite some evidence that during the 1990s business cycle synchronization in the euro area has increased. Higher trade intensity is found to lead to more synchronization, but the point estimates vary widely. The evidence for other factors affecting business cycle synchronization is very mixed.

Original languageEnglish
Pages (from-to)234-273
Number of pages40
JournalJournal of Economic Surveys
Volume22
Issue number2
DOIs
Publication statusPublished - Apr-2008

Keywords

  • business cycles
  • synchronization of business cycles
  • EMU
  • TIME-SERIES
  • INDUSTRIAL SPECIALIZATION
  • INTERNATIONAL EVIDENCE
  • COMMON CURRENCIES
  • TRADE
  • SYNCHRONIZATION
  • COUNTRIES
  • INTEGRATION
  • COMOVEMENT
  • OUTPUT

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