As a result of the high degree of trade, particularly intra-industry, and financial integration, as well as the high degree of convergence of macroeconomic policies in the euro area, the business cycles tend to be significantly synchronised.
Cross-correlations of business cycles (in particular industrial output) have been quite high between the larger euro area countries4 over the past decade, although business cycles have also tended to be more synchronised across the world. Moreover, the dispersion of real GDP growth rates in the euro area has remained very close to its historical average, suggesting the absence of any major asymmetric shocks.