Premium
Business Cycle Synchronization between Euro Area and C entral and E astern E uropean C ountries
Author(s) -
JiménezRodríguez Rebeca,
Morales-Zumaquero Amalia,
Égert Balázs
Publication year - 2013
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12038
Subject(s) - business cycle , recession , economics , synchronization (alternating current) , concordance , financial crisis , monetary economics , econometrics , macroeconomics , computer science , telecommunications , medicine , channel (broadcasting)
We analyze the degree of co‐movements in real macroeconomic aggregates across selected euro area and C entral and E astern E uropean ( CEE ) countries applying a multi‐factor model. Our results suggest that the evolution of the global E uropean 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 M arkov 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.