The European and the Greek Business Cycles: Are they synchronized?

Leon, Costas (2006): The European and the Greek Business Cycles: Are they synchronized?

Abstract

Recent developments in the business cycle empirical literature for the developed economies show that there is an increasing synchronization of the cycles in the sense that cycles are of approximately equal wave length, and exhibit similar lead-lag patterns and decreasing volatility over time, although this is not a universally accepted view. In this study I employ spectral analysis and a VAR model to evaluate the length, the volatility and the transmission mechanism of stochastic shocks between Greece and the Eurozone for the period 1980-2005 with quarterly data. The results verify that both areas exhibit lower volatility over time. However, synchronization of the cycles in terms of correlation and their transmission mechanism seems to become weaker over time.

• Item Type: MPRA Paper
• Institution: Department of International Economics and Development, Democritus University of Thrace, Komotini 69 100, Greece
• Language: English
• Keywords: Business Cycle Synchronization; Transmission Mechanisms; Eurozone; Greece
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles

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