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

Degiannakis, Stavros, Duffy, David, Filis, George and Livada, Alexandra (2016) Business cycle synchronisation in EMU: Can fiscal policy bring member-countries closer? Economic Modelling, 52 (B). pp. 551-563. [Journal article]

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URL: http://ac.els-cdn.com/S0264999315002825/1-s2.0-S0264999315002825-main.pdf?_tid=6156554c-4db2-11e6-a637-00000aacb362&acdnat=1468934101_413e330e988c334745c41f3b50f77563

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:Journal article
Keywords:Time-varying correlation; EMU business cycle; Business cycle synchronisation; Fiscal policy; Diag-BEKK model
Faculties and Schools:Ulster Business School > Department of Accounting, Finance and Economics
Ulster Business School
ID Code:34934
Deposited By: Dr David Duffy
Deposited On:19 Jul 2016 13:12
Last Modified:19 Jul 2016 13:12

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