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On the endogeneity of an exogenous OCA-criterion: The impact of specialisation on the synchronisation of regional business cycles in Europe

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  • Belke, Ansgar
  • Heine, Jens Michael

Abstract

This paper empirically assesses the impact of specialisation on the synchronisation of regional business cycles in two core countries of EMU, namely France and Germany. Several specialisation indices are introduced and some first stylised facts about interregional business cycle correlations are derived. Second, region pair specific and pooled estimations are enacted and tested for robustness in order to calculate the impact of specialisation on the degree of business cycle synchronisation. However, our regression results confirm the hypothesis of a positive impact only partly, but they underline the problem of a common monetary policy for uncommon regions which has already existed in the DM- and in the Franc-zone before.

Suggested Citation

  • Belke, Ansgar & Heine, Jens Michael, 2001. "On the endogeneity of an exogenous OCA-criterion: The impact of specialisation on the synchronisation of regional business cycles in Europe," HWWA Discussion Papers 119, Hamburg Institute of International Economics (HWWA).
    • Handle: RePEc:zbw:hwwadp:26382
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    References listed on IDEAS

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    1. Antonio Aquino, 1978. "Intra-industry trade and inter-industry specialization as concurrent sources of International Trade in manufactures," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 114(2), pages 275-296, June.
    2. Mary Amiti, 1999. "Specialization patterns in Europe," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(4), pages 573-593, December.
    3. Puga, Diego, 1999. "The rise and fall of regional inequalities," European Economic Review, Elsevier, vol. 43(2), pages 303-334, February.
    4. Gianmarco I. P. Ottaviano & Diego Puga, 1998. "Agglomeration in the Global Economy: A Survey of the ‘New Economic Geography’," The World Economy, Wiley Blackwell, vol. 21(6), pages 707-731, August.
    5. G Ottaviano & Diego Puga, 1997. "Agglomeration in a global Economy: A Survey," CEP Discussion Papers dp0356, Centre for Economic Performance, LSE.
    6. Artis, Michael J & Zhang, W, 1997. "International Business Cycles and the ERM: Is There a European Business Cycle?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 2(1), pages 1-16, January.
    7. Ansgar Belke & Daniel Gros, 1998. "Asymmetric shocks and EMU: Is there a need for a stability fund?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 33(6), pages 274-288, November.
    8. Armin Schmutzler, 1999. "The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 13(4), pages 355-379, September.
    9. Antonio Ricci, Luca, 1999. "Economic geography and comparative advantage:: Agglomeration versus specialization," European Economic Review, Elsevier, vol. 43(2), pages 357-377, February.
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    Cited by:

    1. Ansgar Belke & Jens Heine, 2006. "Specialisation patterns and the synchronicity of regional employment cycles in Europe," International Economics and Economic Policy, Springer, vol. 3(2), pages 91-104, November.
    2. Ansgar Belke & Jens Heine, 2007. "On the endogeneity of an exogenous OCA-criterion: specialisation and the correlation of regional business cycles in Europe," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 34(1), pages 15-44, March.

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    More about this item

    Keywords

    Agglomeration; Specialisation; Regional Employment; European Monetary Union; Regional Business Cycles; Synchronisation;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • F15 - International Economics - - Trade - - - Economic Integration
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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