Trade Intensity and Output Synchronisation: On the Endogeneity Properties of EMU

37 Pages Posted: 27 Mar 2013

See all articles by Guglielmo Maria Caporale

Guglielmo Maria Caporale

Brunel University London - Department of Economics and Finance; London South Bank University; CESifo (Center for Economic Studies and Ifo Institute); German Institute for Economic Research (DIW Berlin)

Roberta de Santis

Italian National Institute of Statistics

Alessandro Girardi

National Institute of Statistics (ISTAT)

Multiple version iconThere are 2 versions of this paper

Date Written: March 1, 2013

Abstract

Using annual bilateral data over the period 1988-2011 for a panel of 24 industrialised and emerging economies, we analyse in a time-varying framework the determinants of output synchronisation in EMU (European Monetary Union) distinguishing between core and peripheral member states. The results support the specialisation paradigm rather than the endogeneity hypothesis. Evidence is found in the euro period of diverging patterns between the core and the peripheral EMU countries raising questions about the future stability of EMU.

Keywords: output synchronisation, trade intensity, endogeneity, European Monetary Union (EMU)

JEL Classification: F10, F15, F17, F4

Suggested Citation

Caporale, Guglielmo Maria and de Santis, Roberta and Girardi, Alessandro, Trade Intensity and Output Synchronisation: On the Endogeneity Properties of EMU (March 1, 2013). DIW Berlin Discussion Paper No. 1277, Available at SSRN: https://ssrn.com/abstract=2239672 or http://dx.doi.org/10.2139/ssrn.2239672

Guglielmo Maria Caporale (Contact Author)

Brunel University London - Department of Economics and Finance ( email )

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London South Bank University ( email )

Centre for Monetary and Financial Economics
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CESifo (Center for Economic Studies and Ifo Institute)

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German Institute for Economic Research (DIW Berlin) ( email )

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Roberta De Santis

Italian National Institute of Statistics ( email )

Via Cesare Balbo 16
00184 Rome, 0185
Italy

Alessandro Girardi

National Institute of Statistics (ISTAT) ( email )

Via Cesare Balbo 16
00184 Rome, 0185
Italy

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