Divergence during crisis? The effect of the 2008 crisis on factors of business cycle synchronisztion of EMU countries.

Abstract: The paper examines the effect of the economic crisis of 2008 on factors influencing business cycle synchronization, namely trade intensity, financial integration and difference in economic structure. Using fixed effect regression models, I find that financial integration has a robust positive effect on business cycle synchronization, which is stronger among countries members of the European Monetary Union. There is some evidence that trade intensity is less important in the years of the crisis, while difference in economic structure shows increased significance in those years, especially for countries members of the EMU.