Business Cycle Synchronization between Euro Area and Central and Eastern European Countries

17 Pages Posted: 20 Apr 2013

See all articles by Rebeca Jiménez‐Rodríguez

Rebeca Jiménez‐Rodríguez

University of Salamanca

Amalia Morales-Zumaquero

University of Malaga - Departamento de Teoria e Historia Economica

Balázs Égert

Organization for Economic Co-Operation and Development (OECD); CESifo (Center for Economic Studies and Ifo Institute); Université Paris X Nanterre - Department of Economics; William Davidson Institute

Date Written: May 2013

Abstract

We analyze the degree of co‐movements in real macroeconomic aggregates across selected euro area and Central and Eastern European (CEE) countries applying a multi‐factor model. Our results suggest that the evolution of the global European factor matches well the narrative of main economic events between 1995 and 2011, capturing among others the recession during the recent global financial and economic crisis. This factor plays a central role in explaining real output growth variability in euro area and is negligible in CEE countries. Furthermore, using Markov switching models and concordance indices, we shed light on an increase in business cycle synchronization, with the degree of concordance between country‐specific and European business cycles being high.

Suggested Citation

Jiménez‐Rodríguez, Rebeca and Morales-Zumaquero, Amalia and Egert, Balazs, Business Cycle Synchronization between Euro Area and Central and Eastern European Countries (May 2013). Review of Development Economics, Vol. 17, Issue 2, pp. 379-395, 2013. Available at SSRN: https://ssrn.com/abstract=2254219 or http://dx.doi.org/10.1111/rode.12038

Amalia Morales-Zumaquero

University of Malaga - Departamento de Teoria e Historia Economica ( email )

Malaga, Málaga 29004
Spain

Balazs Egert

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Université Paris X Nanterre - Department of Economics

Nanterre Cedex, 92001
France

William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

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