Against the background of the introduction of the euro in 1999, France, Germany and Italy have recently experienced higher divergence in terms of GDP growth. Indeed, there is no consensus among economists regarding the effects of monetary union, which can lead either to more specialisation as in the United States, or to increasing intra-industry trade, hence higher co-movements. Based on a set of original papers produced by a team of economists from the three main National Central Banks of the euro area, presented to an International Conference held in Paris as well as the contributions of panel of leading economists, the book analyses the latest developments in three largest European economies in a broad perspective, using modern econometric techniques. One of the conclusions is that, while business cycles are more strongly correlated across the three countries, as evidenced by the common reaction to the 2001 slowdown, the three countries still exhibit differences in terms of long term growth.

The contributions of this volume come from the leading central banks in Europe, therefore presenting the view of these banks to the European economic development

Inhalt
General Conclusions.- Measuring Cyclical Comovements and Asymmetries in Growth and Business Cycles.- Supply-side Developments.- Cyclical Patterns in Main Components of Aggregate Demand.- Convergence and Divergence in External Trade.- Panel Discussion.- Measuring Cycles.- Tracking the Economy in the Largest Euro Area Countries: a Large Datasets Approach.- Assessing Aggregate Comovements in France, Germany and Italy Using a Non Stationary Factor Model of the Euro Area.- Supply Side.- Capital, Labour and Productivity: What Role Do They Play in the Potential GDP Weakness of France, Germany and Italy?.- Estimating Potential Output with a Production Function for France, Germany and Italy.- Demand Side.- Synchronisation of Cycles: a Demand Side Perspective.- Short-Run and Long-Run Comovement of GDP and Some Expenditure Aggregates in Germany, France and Italy.- Synchronization of Responses to Cyclical Demand Shocks in France, Germany and Italy: Evidence from Central Banks Macro-models.- External Side.- Market Shares and Trade Specialisation of France, Germany and Italy.- Modelling Imports and Exports of Goods in France, Distinguishing Between Intra and Extra Euro Area Trade.- Has the Impact of Key Determinants of German Exports Changed?.