Business Cycle Sychronization in the Enlarged EU

50 Pages Posted: 25 Aug 2005

See all articles by Zsolt Darvas

Zsolt Darvas

Budapest University of Economic Sciences and Public Administration

Gyorgy Szapary

Magyar Nemzeti Bank

Date Written: August 2005

Abstract

This paper analyzes the synchronization of business cycles between new and old EU members using various measures. The main findings are that Hungary, Poland and Slovenia have achieved a high degree of synchronization for GDP, industry and exports, but not for consumption and services. The other CEECs have achieved less or no synchronization. There has been significant increase in synchronization of GDP and its major components within EMU. This lends support to the argument of OCA endogeneity but there is also evidence of a world cycle. The consumption-correlation puzzle remains, but its magnitude has greatly diminished in the EMU members.

Keywords: Business cycle synchronization, consumption-correlation puzzle, EMU, new EU members, OCA endogeneity

JEL Classification: E32, F41

Suggested Citation

Darvas, Zsolt and Szapary, Gyorgy, Business Cycle Sychronization in the Enlarged EU (August 2005). CEPR Discussion Paper No. 5179, Available at SSRN: https://ssrn.com/abstract=790806

Zsolt Darvas (Contact Author)

Budapest University of Economic Sciences and Public Administration ( email )

Budapest H-1093
Hungary

HOME PAGE: http://www.uni-corvinus.hu/darvas

Gyorgy Szapary

Magyar Nemzeti Bank ( email )

Szabadsag ter 8-9
Budapest, H-1850
Hungary

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