Before the financial and economic crisis, monetary policy unification and interest rate convergence resulted in the divergence of euroarea countries' financial cycles. This divergence is deeply rooted in the financial integration spurred by currency union and strongly correlated with intra-euro...

In this paper we use empirical cross-country correlation coefficients of GDP- and private consumption data as a measure of financial integration between the current EU-member states and the central and eastern European accession states. We find, that the so-called consumption correlation puzzle...