Fragmented Integration and Business Cycle Synchronization in the Greek Regions

This paper examines the degree of business cycle synchronicity among Greek regions and investigates the determinants of the business cycle co-movements of output associated with specific functional and spatial aspects of the integration process among the Greek regions. We analyse nearly 30 years (1980-2008) of data at the NUTSIII level (prefectures). We conclude that the business cycles of prefectures are more synchronized with the NUTSII regional cycle than with the national business cycle revealing a regional (NUTSII) border effect. Moreover, the intensification of the integration process seems to diachronically affect the structural characteristics of the Greek regions and the geography of cyclical synchronization. Our study reveals a two-stage integration process where in the first stage we detect the existence of urbanization economies, while in the second one the existence of localization economies. Furthermore, our study reveals that the metropolitan regions have a low level of business cycle synchronicity with the other regions, stressing Greece's pattern of economic and structural dualism

Disentangling different patterns of business cycle synchronicity in the EU regions

The present paper provides a comprehensive and consolidated analysis of the business cycle synchronicity between European regions and EU-14. Our study is conducted in three levels. First, we analyse regional business cycle synchronization with the EU-14 benchmark cycle, using real GDP in 200 NUTS II regions for a period of 30 years (1980-2009), detrended by Hodrick-Prescott filter. Secondly, we employ a VAR type methodology as a measurement devise to examine the dynamic relationship of the regional business cycles. Our main interest is to study the dynamics of business cycles as well as the pattern of the transmission mechanism to regions with different level of development. Finally, we empirically extend the research on identifying factors which might drive regional business cycle synchronization. In particular, we analyse the role of trade integration-cum- the sectoral patterns of specialisation as determinants of regional growth cycle correlations with the EU-14. Moreover, we draw attention to regional productivity as another possible determinant of business cycle synchronisation associated with the pattern of the spatial distribution of economic activities across regions. Panel three-stage least-squares estimation is implemented for the simultaneous equations between determinants and regional business cycles synchronisation