Bundesbank paper identifies two ‘clusters’ of credit cycles
Credit cycles converge only for countries in the same cluster
Credit cycles are converging to different states in two different "clusters" of economies, according to a discussion paper published today (July 24) by the Deutsche Bundesbank.
In The synchronization of European credit cycles, authors Barbara Meller and Norbert Metiu study the synchronisation of credit booms and busts between 12 European economies and the US from 1972–2011, in what they believe is the first formal statistical analysis of such effects.
The evidence suggests cycles only converge
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