Financial Linkages and Sectoral Business Cycle Synchronization: Evidence from Europe
Hannes Böhm, Julia Schaumburg, Lena Tonzer
IMF Economic Review,
December
2022
Abstract
We analyze whether financial integration leads to converging or diverging business cycles using a dynamic spatial model. Our model allows for contemporaneous spillovers of shocks to GDP growth between countries that are financially integrated and delivers a scalar measure of the spillover intensity at each point in time. For a financial network of ten European countries from 1996 to 2017, we find that the spillover effects are positive on average and much larger during periods of financial stress, pointing towards stronger business cycle synchronization. Dismantling GDP growth into value added growth of ten major industries, we observe that spillover intensities vary significantly. The findings are robust to a variety of alternative model specifications.
Read article
Lecturers
Lecturers at CGDE Institutions ...
See page
Homepage
IWH Medium-Term Projection According to the IWH medium-term projection of the German economy, growth in the next six...
See page
Alumni
IWH Alumni The IWH would like to stay in contact with its former employees. We...
See page
Mayer ref rec
Refereed Publications ...
See page
People
People Job Market Candidates Doctoral...
See page
Wirtschaft im Wandel
Wirtschaft im Wandel Die Zeitschrift „Wirtschaft im Wandel“ will eine breite...
See page
East Germany
East Germany Rearguard Only investments in education will lead to a further catch-up ...
See page
14.12.2021 • 29/2021
German economy not yet immune to COVID 19 ‒ outlook clouded again
The current pandemic wave and supply bottlenecks cause the German economy to stagnate in winter. When infection rates go down in spring, private consumption will increase significantly. In addition, supply restrictions will be gradually reduced. As a result, the economy will regain momentum. The Halle Institute for Economic Research (IWH) forecasts that German gross domestic product will increase by 3.5% (East Germany: 2.7%) in 2022, after 2.7% (East Germany: 2.1%) in the current year. Inflation is expected to decline only slowly.
Oliver Holtemöller
Read press release
MICROPROD
MICROPROD Raising EU Productivity: Lessons from Improved Micro Data The goal...
See page