Business cycle affiliations in the context of European integration

Pedro J. Perez, Denise R. Osborn, Marianne Sensier

Research output: Contribution to journalArticlepeer-review


We study affiliations for the countries of the European Economic and Monetary Union (EMU) with Germany and the USA, using various business cycle measures derived from quarterly real GDP. These measures are Hodrick-Prescott and Baxter-King filtered series and annual growth rates. By using rolling contemporaneous and maximum (over a short lead/ lag interval) correlations, we document increasing correlations of EMU countries with Germany, with these typically being largest during the 1990s. We also document a strong leading role for the USA in relation to these countries in the period since 1993, thereby correcting the fallacy that the European business cycle was disjointed from the USA for most of the 1990s.
Original languageEnglish
Pages (from-to)199-214
Number of pages15
JournalApplied Economics
Issue number2
Publication statusPublished - Feb 2007


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