Decoupling of US and Euro economies

One of the most interesting features of recent business-cycle history is the decoupling of US real economic activity from that of the eurozone (CEPR 2012, ECB 2013). CEPR's Euro Area Business Cycle Dating Committee estimates that the eurozone entered a new recession in the third quarter of 2011, something the US has so far avoided. The decoupling is at odds with historical regularities which show a high level of synchronisation between business cycles in the US and the eurozone.

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