Business cycle synchronisation and currency unions: A review of the econometric evidence using meta-analysis

Abstract

This paper offers a systematic evaluation of the evidence on the effects of currency unions on the synchronisation of economic activity. Focusing on Europe, we construct a database of about 3000 business cycles synchronisation coefficients including their design and estimation characteristics. We find that: (1) synchronisation increased from about 0.4 before the introduction of the euro in 1999 to 0.6 afterwards; (2) this increase occurred in both euro and non-euro countries (larger in former); and (3) there is evidence of country-specific publication bias.