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

Degiannakis, S., Duffy, D., Filis, G. and Livada, A., 2015. Business cycle synchronisation in EMU: Can fiscal policy bring member-countries closer? Economic Modelling, 52, 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 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 uses fiscal policy to promote business cycle synchronisation.

Item Type:Article
ISSN:0264-9993
Uncontrolled Keywords:Business cycle synchronisation; Diag-BEKK model; EMU business cycle; Fiscal policy; Time-varying correlation
Subjects:UNSPECIFIED
Group:Faculty of Management
ID Code:23212
Deposited By: Unnamed user with email symplectic@symplectic
Deposited On:04 Mar 2016 14:11
Last Modified:12 Apr 2016 04:15

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