Abstrakt
Further economic and monetary integration in Europe is currently on
hold due to the economic crisis and even questions about a possible Greece
exile. Especially in those conditions it is important to see whether integrated
Europe can handle future problems and if economic and monetary integration
can be helpful or rather more problematic. The main aim of this paper is to
check to what degree business cycles are synchronized in the Eurozone and
the European Union and what the main determinants of business cycles
synchronization are. To achieve it, the following steps are taken. Firstly, we
turn to optimum currency area theory to see what conditions need to be
met if the European Union and the Euro Area can use common monetary
policy to deal with some economic shocks. Then all necessary methodological
explanations are put. Later on, the preliminary data analysis is employed
to see how business cycles and their determinants have been acting during
the last 20 years. Finally, panel data analysis is used to check how those
determinants actually influence business cycles synchronization. The main
finding of the article is that even though business cycles synchronization
has been progressing in the European Union and the Euro Area, so has the
specialization – divergence in production structure. This may result in less
synchronized business cycles in the future.