Yıl 2017, Cilt: 72 Sayı : 4 Sayfalar 1157 - 1183 2017-12-27
Business Cycle Synchronization in European Economic and Monetary Union (EMU): Testing the OCA During Financial Crisis
Emin Ertürk,Derya Yılmaz,Işın Çetin
18 261

Öz Business cycle synchronization is of vital importance in the functioning of monetary union. A singlemonetary authority pursuing a “one size fits all monetary policy” would not be able to address problems suchas inflation or unemployment of members which have divergent business cycles. Therefore, business cyclesynchronization is regarded as a meta criterion for the optimum currency area theory. Several studies inliterature have tested the business cycle synchronization and have particularly focused on Economic andMonetary Union (EMU). Most studies have used correlation of the cycles as a synchronization measure. Inthis study, the business cycle synchronization in EMU12 countries from 1980 to 2014 was tested and themean of the bilateral correlation coefficients of the cycles was used as a synchronization measure asrecommended by Massmann and Mitchell (2003). However, differing from previous studies, the current studytested the business cycle synchronization during the financial crisis. Three important findings emerged as aresult. First, synchronization increases with monetary integration as argued by Frankel and Rose (1998).Second, the correlations of the cycles rise with the financial crisis. Third, business cycle synchronizationdrops in the aftermath of financial crisis due to the different recovery paths of respective countries.

Anahtar Kelimeler

Optimum Currency Area (OCA) Theory, Economic and Monetary Union (EMU), Endogeneity of OCA, Business Cycle Synchronization
Referans 1Afonso, Antonio and Ana Squiera (2010), “Revisiting Business Cycle Synchronisation in theEuropean Union”, ISEG Economics Working Paper No. 22/2010/DE/UECE.
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Konular Sosyal
Yayımlanma Tarihi 27 Aralık 2017
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Yayımlanma Tarihi : 27 Aralık 2017


Makalenin Yazarları
Emin Ertürk
Derya Yılmaz
Işın Çetin