Macroeconomic Interdependence in European Countries and the Propagation of Business Cycle Shocks
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TexteLangue : français Détails de publication : 2005.
Sujet(s) : Ressources en ligne : Abrégé : We evaluate the influence of international goods trade on the transmission of macroeconomic shocks among European countries. We model business-cycle interdependence as a constrained VAR process. Empirical results show a close link between shock transmission and bilateral trade shares. A diffusion indicator corroborates the dominating influence of the largest economies such as France and Germany within the shock contagion process. Synchronization between European business cycles should increase if the European Monetary Union leads to an increase in intra-European trade.
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We evaluate the influence of international goods trade on the transmission of macroeconomic shocks among European countries. We model business-cycle interdependence as a constrained VAR process. Empirical results show a close link between shock transmission and bilateral trade shares. A diffusion indicator corroborates the dominating influence of the largest economies such as France and Germany within the shock contagion process. Synchronization between European business cycles should increase if the European Monetary Union leads to an increase in intra-European trade.
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