UK business cycle synchronization with Germany and the US: New evidence from time–frequency domain and structure of economic growth

ABSTRACT

This article uses a time–space approach to check the UK business cycle synchronization with Germany and the US. As a novelty, we consider the co-movements in terms of economic growth rate structure. In line with the existing studies, we discover that the UK business cycle is more synchronized with the US then with Germany, and that the co-movements have intensified lately. We also show that co-movements are reduced in terms of business cycle structure and are time–frequency-dependent. Finally, we point out that the UK business cycle became more synchronized with the US cycle given the contribution of investments and external balance to the real growth rate.

KEYWORDS:

• Business cycleco-movement
• wavelets
• aggregate indicator
• UK
• opt-out clause

JEL CLASSIFICATIONS:

• C40
• E32

Disclosure statement

No potential conflict of interest was reported by the author.