Fiscal divergence and business cycle synchronization

irresponsibility is idiosyncratic by Zsolt M. Darvas

Publisher: National Bureau of Economic Research in Cambridge, Mass

Written in English
Published: Pages: 35 Downloads: 608
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Subjects:

  • Fiscal policy -- OECD countries

Edition Notes

StatementZsolt Darvas, Andrew K. Rose, György Szapáry.
SeriesNBER working paper series -- no. 11580., Working paper series (National Bureau of Economic Research) -- working paper no. 11580.
ContributionsRose, Andrew, 1959-, Szapáry, György., National Bureau of Economic Research.
The Physical Object
Pagination35 p. :
Number of Pages35
ID Numbers
Open LibraryOL17627700M
OCLC/WorldCa61522244

Downloadable! This paper investigates the changing nature of economic integration in China. Specifically, we consider business-cycle synchronization (correlation of demand and supply shocks) among Chinese provinces during the period We find that the symmetry of supply shocks has declined after the liberalization initiated in In contrast, the correlation of demand shocks has. euro area fiscal policies, together with steps to deepen the single market. expected trade-creation effects would boost business cycle synchronization, and that EMU would endogenously become an OCA. More recently, financial cycles have been recognized as an important factor for stability. When EMU was created, the existence of financial Cited by: 6. Zsolt Darvas & Andrew K. Rose & Gyorgy Szapary, "Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic," NBER Chapters, in: NBER International Seminar on Macroeconomics , pages , National Bureau of Economic Research, by: 4. Business Cycle Synchronization in the Euro Area and the Impact of the Financial Crisis 1 In the empirical literature, the syn-chronization of business cycles between individual countries has become estab-lished as a key criterion of whether these countries are ready to form a monetary union (see section 1 for a literature review). The argumentation.

Recent Developments in Optimum Currency Areas Andrew K. Rose UC Berkeley, CEPR and NBER. 2 Two Recent findings: cy Unions Raise Trade and Fiscal Convergence Raise Business Cycle Synchronization Sensible Currency Unions seem to generate OCAs! 3 Question #1 BCS = α + β*fiscal divergence + γ*trade + ε.   Previous studies have discounted important factors and indirect channels that might contribute to business cycle synchronization (BCS) in the EU. We estimate the effects of market integration and economic policy coordination on bilateral business cycle correlations over the period – using a simultaneous equations model that takes into accounts both the endogenous Cited by: WP /5 Zsolt Darvas – Gábor Vadas: A New Method for Combining Detrending Techniques with Application to Business Cycle Synchronization of the New EU Members; WP /4 Gábor P. Kiss and Gábor Vadas: Mind the Gap - International Comparison of Cyclical Adjustment of the Budget. Globalisation and the International Transmission of Business Cycles: Empirical Evidence from Ireland* JEAN GOGGIN a AND IULIA SIEDSCHLAG b,c a Central Bank of Ireland b Economic and Social Research Institute, Dublin c Department of Economics, Trinity College Dublin Abstract Given its high degree of integration into the world economy, Ireland has been affected.

  Darvas Z, Rose AK, Szapáry G () Fiscal divergence and business cycle synchronization: irresponsibility is idiosyncratic. NBER working paper , forthcoming in Frankel, JA, Pissarides CA (eds.) NBER International Seminar on Macroeconomics MIT, Cited by: In specific, they compare results for synchronization of GDP growth among countries—business cycle co-movement. During tranquil times, the data show a synchronization coefficient ranging from to The model generates a coefficient of —the correct . Szapáry (): “Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic”, in Frankel, J. and C. Pissarides eds., NBER Égert, B. (), "Assessing Equilibrium Exchange Rates in CEE Acceding Countries: Can We Have DEER with BEER Without FEER?". business cycle co-movements in the literature. Since theory is indeterminate upon which factors are behind synchronization, identifying the determinants of synchronization is thus an empirical matter. This paper is an attempt to empirically investigate the determinants of business cycle synchronization .

Fiscal divergence and business cycle synchronization by Zsolt M. Darvas Download PDF EPUB FB2

Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic Zsolt Darvas, Andrew K. Rose, Gyorgy Szapary. Chapter in NBER book NBER International Seminar on Macroeconomics (), Jeffrey A.

Frankel and Christopher Pissarides, editors (p. - ) Conference held JunePublished in May by MIT PressCited by: Using a panel of 21 OECD countries and 40 years of annual data, we find that countries with similar government budget positions tend to have business cycles that fluctuate more closely.

That is, fiscal convergence (in the form of persistently similar. Get this from a library. Fiscal divergence and business cycle synchronization: irresponsibility is idiosyncratic. [Zsolt M Darvas; Andrew Rose; György Szapáry; National Bureau of Economic Fiscal divergence and business cycle synchronization book -- "Using a panel of 21 OECD countries and 40 years of annual data, we find that countries with similar government budget positions tend to have business cycles that fluctuate more closely.

Comment on "Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic" Roberto Rigobon.

Chapter in NBER book NBER International Seminar on Macroeconomics (), Jeffrey A. Frankel and Christopher Pissarides, editors (p. - ) Conference held JuneAuthor: Roberto Rigobon. BibTeX @MISC{Frankel05fiscaldivergence, author = {Jeffrey Frankel and Zsolt Darvas and Andrew K.

Rose and Gyorgy Szapary and Zsolt Darvas and Gyorgy Szapary and Magyar Nemzeti Bank}, title = {Fiscal Divergence and Business Cycle Synchronization: Irresponsibility Is Idiosyncratic}, year =. cross-country differences in the fiscal policy and business cycle synchronization (BCS), hence Measure of synchro = α+ β*fiscal divergence + ε • Strategy: calculate various measures of both the left and right hand sides, estimate, do various robustness checks.

Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic Using a panel of 21 OECD countries and 40 years of annual data, we find that countries with similar government budget positions tend to have business cycles that fluctuate more closely.

Fiscal divergence and business cycle synchronization: Irresponsibility is idiosyncratic. By Zsolt Darvas, Andrew K. Rose and Gy\uf6rgy Szap\ue1ry. Download PDF (1 MB) Abstract. Using a panel of 21 OECD countries and 40 years of annual data, we find that countries with similar government budget positions tend to have business cycles that.

Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic. Zsolt Darvas, Andrew K. Rose, György Szapáry. Using a panel of 21 OECD countries and 40 years of annual data, we find that countries with similar government budget positions tend to have business cycles that fluctuate more closely.

Comment on" Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic. That is, fiscal convergence (in the form of persistently similar ratios of government surplus/deficit to GDP) is systematically associated with more synchronized business cycles.

We also find evidence that reduced fiscal deficits increase business cycle synchronization. Fiscal divergence and business cycle synchronization: irresponsibility is idiosyncratic Author: Zsolt M Darvas ; Andrew Rose ; György Szapáry ; National Bureau of Economic Research.

be associated with reduced business cycle synchronization. From a theoretical viewpoint then, the matter is ambiguous. If fiscal policy divergence is a response to asymmetric shocks then it may be associated with enhanced business cycle coherence; if fiscal shocks themselves cause business cycles, then the opposite may be true.

That is, fiscal convergence (in the form of persistently similar ratios of government surplus/deficit to\ud GDP) is systematically associated with more synchronized business cycles.

We also find evidence that reduced fiscal deficits increase business cycle synchronization. This paper investigates the effects of fiscal policy and public-sector size on the bilateral business cycle synchronisation between 14 EU countries, while controlling for the effects of factor productivity, trade, inflation, sectoral specialisation and trade : Sabrina Bunyan, David Duffy, George Filis, Ishmael Tingban.

cycles of countries with similar government budget positions move more closely. Thus, fiscal divergence i.e., deviations from a fiscally responsible behaviour, creates idiosyncratic shocks and is associated with lower business cycles synchronization. Darvas and Szap´ary () examine business cycle synchronization in the new EU members.

Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic Author: György Szapéry ; Zsolt Darvas ; Andrew K Rose ; National Bureau of Economic Research.

rency zone. Moreover, business cycle synchronization enables a more effective coordination of fiscal and mon‐ etary policies (Mundell, ). Business cycle synchronization may also impact upon the long run viability of monetary union, particularly in the presence of ‘decoupling’ of business cycles, such as in the EMU, where de‐Author: Sabrina Bunyan, David Duffy, George Filis, Ishmael Tingbani.

Abstract. This thesis aims to detect whether fiscal policy convergence (or divergence) is a determinant of business cycle synchronization in the European Economic and Monetary Union (EMU) of the European Union. The thesis is based on the literature on Optimum Currency Areas (OCA) which states that a common currency and a collective monetary.

Elias Papaioannou, EIB Institute Presentation Financial Integration and Business Cycle Synchronization. Some Theory International real business cycle model: financial (banking) linkages magnify idiosyncratic (country-specific) shocks in the real economy (productivity). Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic}, year = {}} Share.

OpenURL. Abstract. Magyar Nemzeti Bank, and the National Bank of Poland. The views expressed below do not necessarily represent those of the Magyar Nemzeti Bank or its staff. A current version of this paper, key output, and the data. A fresh look at business cycle synchronisation in the euro area Christian Gayer* Abstract This paper revisits the issue of business cycle synchronisation in the euro area looking back on more than eight years of EMU experience.

The dispersion of output gaps across Member States has reached historically low levels since around File Size: KB. [Fiscal divergence and business cycle synchronization: irresponsibilit," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol.

0(12), pages Fiscal divergence and business cycle synchronization: Irresponsibility is idiosyncratic. In J. Frankel and C. Pissarides (Eds.), NBER international seminar on macroeconomics (pp. – ). Cambridge and London: MIT Press.

[Google Scholar]) and Furceri ( Furceri, D. Fiscal convergence, business cycle volatility, and growth. This thesis aims to detect whether fiscal policy convergence (or divergence) is a determinant of business cycle synchronization in the European Economic and Monetary Union (EMU) of the European Union.

The thesis is based on the literature on Optimum Currency Areas (OCA) which states that a common currency and a collective monetary policy are. Zsolt Darvas & Andrew K. Rose & György Szapáry, "Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic," Working PapersDepartment of Mathematical Economics and Economic Analysis, Corvinus University of Budapest.

Theoretically, trade integration may lead trading countries’ business cycles in either direction: economic convergence (synchronization) or economic divergence (non- synchronization). BCS depends on bilateral trading relations and other structural and policy variables. If demand shocks dominate business cycle fluctuations, one should.

A világ országának-köztük 21 OECD-tagország évnyi adatait vizsgálva, arra a következtetésre jutottunk, hogy a hasonló állami költségvetési pozíciójú országok konjunktúraciklusai között szorosabb együttmozgás mutatható ki.

Azaz, a fiskális. synchronization in non-hydrocarbon business cycles across the GCC economies, and a decline in the degree of synchronicity in the s, if Kuwait is excluded from the sample, partly because of divergent fiscal policies. JEL Classification Numbers: C14, C25, E32, E62, F15, F41, F42, Q33, Q43Cited by: 4.

CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): We propose the analysis of the dynamics of the standard deviation of business cycles across euro area countries in order to evaluate the patterns of cyclical convergence in the European Monetary Union (EMU) for the period We identify significant business cycle divergence taking place in the mid-eighties.

Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic This is a CEPR Discussion Paper. CEPR charges a fee of $ for this paper.This study has been motivated by the numerous proposals for greater monetary and economic integration in Africa.

We investigate the correlation of shocks between the exiting members of the West African Economic and Monetary Union and potential entrants in the region.

In Southern Africa, we examine the pair wise correlations using the hub and spoke framework with South Africa as the hub.• Analysis of synchronization • The role of fiscal policy • Homogeneity in business cycles in Europe as much as in US (Agresti and Mojon,Wynne and Koo, ).

when a period of smooth divergence started. A regime of more synchronization is obtained from on.