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Studies in Nonlinear Dynamics & Econometrics

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Volume 19, Issue 5


Business cycle (de)synchronization in the aftermath of the global financial crisis: implications for the Euro area

Stelios Bekiros
  • Corresponding author
  • IPAG Business School, 184 Boulevard Saint-Germain, 75006 Paris, France
  • European University Institute, Department of Economics, Via della Piazzuola 43, I-50133 Florence, Italy
  • Athens University of Economics and Business, Department of Finance, 76 Patission str, GR-104 34, Athens, Greece
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/ Duc Khuong Nguyen / Gazi Salah Uddin / Bo Sjö
Published Online: 2015-02-03 | DOI: https://doi.org/10.1515/snde-2014-0055


The introduction of Euro currency was a game-changing event intended to induce convergence of Eurozone business cycles on the basis of greater monetary and fiscal integration. The benefit of participating into a common currency area exceeds the cost of losing autonomy in national monetary policy only in case of cycle co-movement. However, synchronization was put back mainly due to country-specific differences and asymmetries in terms of trade and fiscal policies that became profound at the outset of the global financial crisis. As opposed to previous studies that are mostly based on linear correlation or causality modeling, we utilize the cross-wavelet coherence measure to detect and identify the scale-dependent time-varying (de)synchronization effects amongst Eurozone and the broad Euro area business cycles before and after the financial crisis. Our results suggest that the enforcement of an active monetary policy by the ECB during crisis periods could provide an effective stabilization instrument for the entire Euro area. However, as dynamic patterns in the lead-lag relationships of the European economies are revealed, (de)synchronization varies across different frequency bands and time horizons.

This article offers supplementary material which is provided at the end of the article.

Keywords: convergence; Eurozone; integration; wavelet coherence

JEL Classification: C22; E32


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About the article

Corresponding author: Stelios Bekiros, IPAG Business School, 184 Boulevard Saint-Germain, 75006 Paris, France; European University Institute, Department of Economics, Via della Piazzuola 43, I-50133 Florence, Italy; and Athens University of Economics and Business, Department of Finance, 76 Patission str, GR-104 34, Athens, Greece, Tel.: +33 01 53 63 36 00, Fax: +33 01 45 44 40 46, e-mail:

Published Online: 2015-02-03

Published in Print: 2015-12-01

Citation Information: Studies in Nonlinear Dynamics & Econometrics, Volume 19, Issue 5, Pages 609–624, ISSN (Online) 1558-3708, ISSN (Print) 1081-1826, DOI: https://doi.org/10.1515/snde-2014-0055.

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Studies in Nonlinear Dynamics & Econometrics, 2015, Volume 19, Number 5

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