Comparisons of Business Cycles in the EC: Idiosyncracies and Regularities

Abstract

annual data since 1960 and the Real Business Cycle model as a guidance. The evidence suggests that there are remarkable similarities between the business cycle pattern of these countries, despite significant differences in the patterns of fiscal and monetary policies and the terms of trade. We take this evidence to suggest that the type of shocks and the propagation mechanism is fairly similar across the EC countries. Hence the process of European integration under a set of uniform institutions and policies should not be a problem as far as the business cycle is concerned.