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The fall and rise of business cycle co-movements in Imperial Austria's regions

Missiaia, Anna LU and Ciccarelli, Carlo (2018) In Annals of Regional Science 60(1). p.171-193
Abstract
his paper investigates regional business cycle co-movements in Austria–Hungary from 1867 to 1913. Economic theory suggests that rising market integration induces sectoral specialisation, resulting in a reduction in the correlation of regional GDP cycles (Krugman effect). However, the synchronisation of business cycles is expected to increase because of the growing inter-linkages among regions led by the adoption of common currency and common economic policies (Frankel and Rose effect). We show that in the case of nineteenth-century Austria–Hungary the specialisation effect, most likely amplified by the stock market crisis of 1873, prevailed during 1867–1890, while the common currency/policy effect prevailed during 1890–1913, when the gold... (More)
his paper investigates regional business cycle co-movements in Austria–Hungary from 1867 to 1913. Economic theory suggests that rising market integration induces sectoral specialisation, resulting in a reduction in the correlation of regional GDP cycles (Krugman effect). However, the synchronisation of business cycles is expected to increase because of the growing inter-linkages among regions led by the adoption of common currency and common economic policies (Frankel and Rose effect). We show that in the case of nineteenth-century Austria–Hungary the specialisation effect, most likely amplified by the stock market crisis of 1873, prevailed during 1867–1890, while the common currency/policy effect prevailed during 1890–1913, when the gold standard was adopted in both Austria and Hungary. However, core and peripheral regions contributed differently to the correlation of business fluctuations. (Less)
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author
and
organization
publishing date
type
Contribution to journal
publication status
published
subject
in
Annals of Regional Science
volume
60
issue
1
pages
171 - 193
publisher
Springer
external identifiers
  • scopus:85030529985
ISSN
1432-0592
DOI
10.1007/s00168-017-0850-5
language
English
LU publication?
yes
id
1d58512d-9c9e-491f-a12c-5cb1774e73fd
date added to LUP
2017-09-26 12:00:21
date last changed
2022-01-30 22:57:32
@article{1d58512d-9c9e-491f-a12c-5cb1774e73fd,
  abstract     = {{his paper investigates regional business cycle co-movements in Austria–Hungary from 1867 to 1913. Economic theory suggests that rising market integration induces sectoral specialisation, resulting in a reduction in the correlation of regional GDP cycles (Krugman effect). However, the synchronisation of business cycles is expected to increase because of the growing inter-linkages among regions led by the adoption of common currency and common economic policies (Frankel and Rose effect). We show that in the case of nineteenth-century Austria–Hungary the specialisation effect, most likely amplified by the stock market crisis of 1873, prevailed during 1867–1890, while the common currency/policy effect prevailed during 1890–1913, when the gold standard was adopted in both Austria and Hungary. However, core and peripheral regions contributed differently to the correlation of business fluctuations.}},
  author       = {{Missiaia, Anna and Ciccarelli, Carlo}},
  issn         = {{1432-0592}},
  language     = {{eng}},
  number       = {{1}},
  pages        = {{171--193}},
  publisher    = {{Springer}},
  series       = {{Annals of Regional Science}},
  title        = {{The fall and rise of business cycle co-movements in Imperial Austria's regions}},
  url          = {{http://dx.doi.org/10.1007/s00168-017-0850-5}},
  doi          = {{10.1007/s00168-017-0850-5}},
  volume       = {{60}},
  year         = {{2018}},
}