Business cycle synchronisation in EMU: Can fiscal policy bring member-countries closer?

Degiannakis, S., Duffy, D., Filis, G. and Livada, A., 2016. Business cycle synchronisation in EMU: Can fiscal policy bring member-countries closer? Economic Modelling, 52 (Part B), pp. 551-563.

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DOI: 10.1016/j.econmod.2015.09.035

Abstract

The present study adds to the literature on the impact of fiscal policy on business cycle synchronisation. Specifically, it investigates the effects of fiscal policy on business cycle synchronisation between the 10 EMU member-countries and the aggregate EMU12-wide business cycle, using a time-varying framework. The findings suggest that fiscal policy has important effects on business cycle synchronisation for all 10 EMU countries. Hence, fiscal policy is shown to have the potential to be supportive of macroeconomic stabilisation in the Eurozone. However the evidence reveals that none of the countries under examination consistently use fiscal policy to promote business cycle synchronisation.

Item Type:Article
ISSN:0264-9993
Additional Information:Time varying correlation, EMU business cycle, business cycle synchronisation, fiscal policy, Diag-BEKK model.
Subjects:UNSPECIFIED
Group:Faculty of Management
ID Code:22599
Deposited By: Unnamed user with email symplectic@symplectic
Deposited On:06 Oct 2015 13:14
Last Modified:27 Oct 2016 01:08

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