Ostalo
On the behavioral antecedents of business cycle coherence in the euro area
Petar Sorić
orcid.org/0000-0002-6773-264X
; Sveučilište u Zagrebu, Ekonomski fakultet
Ivana Lolić
orcid.org/0000-0003-3112-7699
; Sveučilište u Zagrebu, Ekonomski fakultet
Marija Logarušić
orcid.org/0000-0001-6608-1067
; Sveučilište u Zagrebu, Ekonomski fakultet
Sažetak
Departing from the mainstream literature on European monetary integration, we acknowledge the interdependence of economic sentiment synchronization and business cycle co-movements for 17 individual European countries and the euro area (EA). Building upon both hard and soft data, we find that sentiment cycles are in fact the driving force behind general economic cycle synchronization. This finding is robust with respect to different synchronization indicators, different Granger causality test specifications, data frequencies (monthly vs. quarterly), and the targeted EA composition (EA11 vs. EA19). The latter is of particular importance, implying that recent EA enlargements have not decreased its homogeneity in this regard. Our results exhibit a certain degree of dependence upon the business cycle phase. The synchronization of 17 examined countries vis-a-vis the EA seems to be even more intensive in recessions than in expansions. In other words, common monetary policy of the ECB should be able to effectively act as a countercyclical tool when an individual national economy is facing a recession.
Ključne riječi
economic sentiment; business cycle synchronization; Optimum Currency Areas; Euro
Hrčak ID:
253493
URI
Datum izdavanja:
11.3.2021.
Posjeta: 543 *