Business cycle synchronization in Europe: Evidence from the Scandinavian Currency Union, European Commission, Economic Papers 402

This paper studies business cycle synchronization in the three Scandinavian coun-tries Denmark, Norway and Sweden prior to, during and after the Scandinavian Currency Union 18731913. We find that the degree of synchronization tended to increase during the currency union, thus supporting earlier empirical evidence. Es-timates of factor models suggest that common Scandinavian shocks are important for these three countries. At the same time we find evidence suggesting that the importance of these shocks does not depend on the monetary regime