Do political events aect business cycles? The Maastricht treaty, the creation of the ECB and the euro economy� (original) (raw)

This paper provides some evidence on the e¤ect of the Maastricht treaty and the creation of the ECB on the dynamics of the European business cycles. With a panel VAR approach and quarterly data for seven European countries over the sample 1980:1-2004:4, the paper shows that: (i) an areawide cycle emerges in the 1990s; (ii) volatility, persistence and correlation of national cycles change over time, but not necessarily at the dates of the two political events; (iii) in an out-of-sample forecasting sense, neither event made a huge di¤erence of European business cycles.