Business cycle synchronization and insurance mechanisms in the EU

Afonso, António; Furceri, Davide

http://hdl.handle.net/10400.5/2137

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Authors

Afonso, António

Furceri, Davide

Abstract(s)

In this paper we provide a positive exercise on past business-cycle correlations and risk sharing in the European Union, and on the ability of insurance mechanisms and fiscal policies to smooth income fluctuations. The results suggest in particular that while some of the new Member States have well synchronized business cycles, for some of the other countries, business cycles are not yet well synchronized with the euro area's business cycle, and risk-sharing mechanisms may not provide enough insurance against shocks.

Keywords

EU Optimum Currency Areas Business Cycle Synchronization Insurance Mechanisms

URI

http://hdl.handle.net/10400.5/2137

Citation

Afonso, António e Davide Furceri . 2007. "Business cycle synchronization and insurance mechanisms in the EU". European Central Bank working paper series nº 844-2007