Lucrezia Reichlin

Discussion: Fiscal Divergence and Business Cycle Synchronization: Irresponsability is Idiosyncratic by Darvas, A. K. Rose and G. Szapary

The idea of the paper is simple and appealing: the Maastricht Treaty, to the extent that it has enforced fiscal convergence, may have also induced business cycle synchronization. In other words, assuming that in the last fifteen years we have observed an increase in business cycle synchronization, this is likely to have been endogenous. The paper analyzes twenty one OECD countries on the basis of a simple panel regression where correlations between the GDP growth of countries’ pairs is regressed against indicators of fiscal divergence between the same pairs.

Abbonamento a RSS - Lucrezia Reichlin