DOI: 10.1140/epjst/e2008-00835-3
Analyzing convergence and synchronicity of business and growth cycles in the euro area using cross recurrence plots
P.M. CrowleyTexas A&M University - Corpus Christi, USA
patrick.crowley@tamucc.edu
Abstract
Convergence and synchronisation of business and growth cycles are important
issues in the efficient formulation of euro area monetary policy by the
European Central Bank (ECB). Although several studies in the economics
literature address the issue of synchronicity of growth within the euro
area, this is the first study to address this issue using cross recurrence
analysis. The main findings are that member state growth rates have largely
converged since the introduction of the euro, but there is a wide degree of
different synchronisation behaviours which appear to be non-linear in
nature. These differences could cause problems in future implementation of a
single (ECB-determined) monetary policy in the euro area.
© EDP Sciences, Springer-Verlag 2008
