Economics, 3rd Edition

770  PART 15  INTERNATIONAL MACROECONOMICS

Symmetric Demand Shocks

The economic cycle across the countries of the euro area does appear to be positively correlated, in the 

sense that the timing of strong growth and downturns appear to be very close. In Figure 36.3 we have 

graphed data on annual growth rates in real GDP for France, Germany and the euro area as a whole for 

every year from 2005 to 2014. Clearly, the movements in growth rates over this period for France and 

 Germany and for the whole euro area are very close. There is no clear example of asymmetric demand 

shocks impacting upon these countries as in the example we have used to illustrate the potential  problems 

of a monetary union.