Object structure

Business cycle synchronization in the EU economies after the recession of 2007-2009

Group publication title:

Argumenta Oeconomica


Osińska, Magdalena ; Kufel, Tadeusz ; Błażejowski, Marcin ; Kufel, Paweł

Subject and Keywords:

business cycle ; synchronization ; cross-spectrum ; moving window ; European Union


Argumenta Oeconomica, 2016, Nr 2 (37), s. 5-30


The aim of the study is to evaluate business cycle synchronization in the EU economies including the determination of the impact of the global financial and economic recession of 2007-2009. In general, the economic recession can be understood as one of the phases of the global business cycle because all countries had suffered somehow from this enormous collapse. However, the depth and length of this phase was different across the countries due to different approaches to the monetary and fiscal policy that was applied to stop it and to start economic recovery. That is why some substantial changes could arise leading to the economic divergence of the economies that might affect not only the stability of particular economies but also periods of their recovery, which in consequence, might spoil the business cycle synchronization that had been observed before the recession. This is particularly important for the future of such economic bodies like the European Union and the Eurozone that experienced both the advantages and the disadvantages of common policy and currency. It is commonly assumed that the GDP series in constant prices measure both business activity and business cycle. In the presented research, seasonally adjusted quarterly GDP series from 1995-2012 were analyzed. To determine how much the recession affected business cycle synchronization, a cross-spectral analysis for the whole analyzed period and for moving windows was implemented. We proposed to apply the tools of cross-spectral analysis such as coherence, phase and amplitude of the specified frequencies taking into account the time window of 48 quarters. Such a procedure allows indicating a rapid change in business cycle synchronization conditionally on the period of the analysis which includes the period 2007-2009. The empirical findings show that the assumption of business cycle synchronization within the EU was confirmed for the strongest economies of the European Union like Germany, Great Britain and France. Moreover, Poland and Spain can also be included in the club of synchronized economies. Other EU economies like the Hungarian, Italian and Portugese, were less synchronized with the EU business cycle, although in the period of crisis they were closer to the whole economic area. For the non-EU countries, a significantly weaker synchronization with the EU was observed. The hypothesis that the financial crisis caused similarities in the business cycle paths of the EU countries and the USA was confirmed, while for Japan and Switzerland it could not be confirmed in the light of the obtained results.


Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu

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Argumenta Oeconomica, 2016, Nr 2 (37)


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Uniwersytet Ekonomiczny we Wrocławiu



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