Business Cycle Synchronization in the EU: A Regional-Sectoral Look through Soft-Clustering and Wavelet Decomposition
欧盟经济周期同步性:软聚类与小波分解的区域行业视角
This paper elaborates on the sectoral-regional view of the business cycle synchronization in the EU -- a necessary condition for the optimal currency area. We argue that complete and tidy clustering of the data improves the decision maker's understanding of the business cycle and, by extension, the quality of economic decisions. We define the business cycles by applying a wavelet approach to drift-adjusted gross value added data spanning over 2000Q1 to 2021Q2. For the…