Business cycles synchronization and clustering in Europe (1960–2009)

Business Cycle Synchronization in the EMU: Core vs. Periphery

“…Synchronization between core and peripheral countries was rather low during the 1970s until the beginning of the 1990s (see Figure 2a). During the run-up to the EMU, cycles seemed to synchronize rather sharply, in line with other studies that mention the "Maastricht effect" (Papageorgiou et al, 2010;Inklaar et al, 2008;AguiarConraria and Soares, 2011). After the establishment of the currency area, the output co-movements continued to oscillate on a rather high level in the early 2000s.…”

“…The positive effects of EMU on business cycle synchronization are confirmed, with albeit different statistical methods, by Altavilla (2004), Gogas (2013), Darvas and Szapáry (2008), Gonçalves et al (2009), among others, as well as for different proxies for economic activity such as industrial production (Gayer, 2007) or economic sentiment indicators (Aguiar-Conraria et al, 2013). On the other hand, other studies fail to detect any EMU effect on business cycle synchronization (Camacho et al, 2006;Weyerstrass et al, 2011), or find even a dampening one (Papageorgiou et al, 2010).…”

Political cycles under external economic constraints: Evidence from Cyprus

“…The implementation of the common monetary policy, the institutional structure of the EU, and the strong linkages between European countries, may have forced politicians to relinquish their ability to generate partisan cycles, and left them with no other choice but to manipulate fiscal policy when elections approached. Arguably, the existence of national electoral-fiscal cycles can account, to some extent, for the considerable cross-country differences in policy instrument interdependencies ( van Aarle, Garretsen, & Gobbin, 2003), and be seen as one of the factors that prevents complete economic integration (see Bailey & Choi, 2003) and greater synchronization of business cycles (Papageorgiou, Michaelides, & Milios, 2010) across the EMU member states. Furthermore, the incentives for politicians to adopt politically motivated fiscal policies (which partly explains the failure of several countries to abide by the spirit of the Stability and Growth Pact) can account for volatilities in the euro's external value.…”

Classification of the risk in the new financing framework of the Deposit Guarantee Systems in Europe: K-Means Cluster Analysis and Soft Computing

“…In the k-means clustering, the formation begins with an initial division, and by means of successive tests, contrasts the effect the allocation of each of the data has on the residual variance to each group 30 . The minimum value of the variance determines a configuration of new groups with their respective means.…”