Coherence of Output Gaps in the Euro Area: The Impact of the COVID-19 Shock

32 Pages Posted: 11 Apr 2022

See all articles by Jakob de Haan

Jakob de Haan

University of Groningen - Faculty of Economics and Business; CESifo (Center for Economic Studies and Ifo Institute); De Nederlandsche Bank

Jan P. A. M. Jacobs

University of Groningen - Faculty of Economics and Business

Renske Zijm

University of Groningen

Date Written: 2022

Abstract

Using the measures proposed by Mink et al. (2012), we reexamine the coherence of business cycles in the euro area using a long sample period. We also analyze the impact of the COVID-19 pandemic on business cycle coherence and examine whether our measures for business cycle coherence indicate a core versus periphery within EMU. Our results suggest that business cycle coherence did not increase monotonically. The COVID-19 pandemic made that the signs of the output gaps of euro area countries became more similar, but we find large differences in the amplitude of the output gaps across countries.

Keywords: Covid-19 crisis, business cycle coherence, synchronization, output gaps, euro area

JEL Classification: E320, F020, F420

Suggested Citation

de Haan, Jakob and Jacobs, Jan P.A.M. and Zijm, Renske, Coherence of Output Gaps in the Euro Area: The Impact of the COVID-19 Shock (2022). CESifo Working Paper No. 9654, Available at SSRN: https://ssrn.com/abstract=4072259 or http://dx.doi.org/10.2139/ssrn.4072259

Jakob De Haan (Contact Author)

University of Groningen - Faculty of Economics and Business ( email )

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Groningen, 9700 AV
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CESifo (Center for Economic Studies and Ifo Institute)

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Germany

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De Nederlandsche Bank ( email )

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Jan P.A.M. Jacobs

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Renske Zijm

University of Groningen ( email )

P.O. Box 800
9700 AH Groningen, Groningen 9700 AV
Netherlands

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