UNIDE - ECR
AV FORÇAS ARMADAS
Lisbon University Institute
Business Cycles, Core and
Álvaro M. Pina
Periphery in Monetary Unions:
Working Paper - 19/08
- Lisbon University Institute
and North America
Business Cycles, Core and Periphery in Monetary Unions:
Comparing Europe and North America
Alexandra Ferreira-Lopes†and Álvaro M. Pina‡
We compare Europe with the USA and Canada as regards business cycle synchronization
and core-periphery patterns. A long sample (1950-2005) makes it possible to study how these
aspects have evolved over time. Results support the economic viability of EMU. Average
cyclical correlations among European countries have risen signicantly, reaching levels close
to, or even higher than, those of North American regions. Applying fuzzy clustering to the
analysis of core-periphery issues, we nd Europe to actually outperform North America: the
core-periphery divide is milder, and peripheral status seems generally less protracted.
JEL Classication: C65, E32, E42, F33.
Keywords: European Union, Canada, United States, Monetary Unions, Business Cycles, Fuzzy
The authors would like to thank João F. Gomes and participants at a seminar at ISEG for helpful comments,
Todd Clark for sharing his Rats programmes for GMM estimation, and Marc Tomljanovich for providing data for
Canada. The usual disclaimer applies. Financial support by FCT (Fundação para a Ciência e a Tecnologia), Por-
tugal, is gratefully acknowledged, this article being part of the Multi-annual Funding Project (POCTI/0436/2003).
†ISCTE (Lisbon University Institute), Economics Department, UNIDE, and DINÂMIA. Avenida das Forças
Armadas, 1649-026 Lisboa, Portugal.
+351 217903901; Fax: +351 217903933; E-mail:
‡ISEG (School of Economics and Management)/Technical University of Lisbon and UECE (Research Unit