Convergence of European Business Cycles: Evidence from a Graph Theory-Based Model

20 Pages Posted: 29 Jan 2014

See all articles by Theophilos Papadimitriou

Theophilos Papadimitriou

Department of Economics, Democritus University of Thrace

Periklis Gogas

Democritus University of Thrace - Department of Economics

Georgios Sarantitis

Democritus University of Thrace - Department of Economics

Date Written: January 28, 2014

Abstract

This paper examines the co-movement patterns of European business cycles during the period 1986-2011, having as a focal point the year of the euro coin introduction, in 1999. We work within a Graph Theory context and apply a rolling window to study the evolution of the network that corresponds to the GDP growth cross-correlations of 22 European economies. The network is analyzed using the metrics of node degree and network density as well as the Minimum Dominating Set, providing us not only with a quantitative but also with a qualitative insight of the studied data set. Our main empirical results indicate that despite some distinct signs of divergence, the business cycles of the European countries display overall increased synchronization throughout the selected time sample.

Keywords: Business cycles, synchronization, convergence, Graph Theory, Network Analysis, complex economic networks, rolling window, Minimum Dominating Set

Suggested Citation

Papadimitriou, Theophilos and Gogas, Periklis and Sarantitis, Georgios, Convergence of European Business Cycles: Evidence from a Graph Theory-Based Model (January 28, 2014). Available at SSRN: https://ssrn.com/abstract=2386920 or http://dx.doi.org/10.2139/ssrn.2386920

Theophilos Papadimitriou

Department of Economics, Democritus University of Thrace ( email )

University Campus
Komotini, 69100
Greece

HOME PAGE: http://econ.duth.gr/author/papadimi/

Periklis Gogas

Democritus University of Thrace - Department of Economics ( email )

Komotini, 69100
Greece

HOME PAGE: http://www.econ.duth.gr/personel/dep/gkogkas/index.en.shtml

Georgios Sarantitis (Contact Author)

Democritus University of Thrace - Department of Economics ( email )

Komotini
Greece

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