This paper re-examines the relationship between trade intensity and business cycle synchronization for 21 OECD countries during 1970-2003. Instead of using instrumental variables, we estimate a multivariate model including variables capturing specialisation, financial integration, and similarity...

In this paper we argue that in contrast to the conclusion of Artis and Zhang, there is not much evidence in support of the view that increased exchange rate stability is related to more synchronised business cycles in Europe. This finding may have important consequences, as existing differences...

Soon, euro area membership could more than double, with the vast majority of accession countries being quite different in economic terms compared with current members. Under the current decision-making system, this can lead to high decisionmaking costs and there is a risk that monetary policy...