Fuinhas, José AlbertoMarques, António Cardoso2019-01-222019-01-222011http://hdl.handle.net/10400.6/68281This paper focuses on analyzing the impact of the consequences of monetary union on GDP volatility in Portugal. Using quarterly data from 1978:01 to 2009:04, we test the output composition effect and the correlation effect through three alternative approaches of volatility: year on year, quarter on quarter and the value of output gap. Results support the presence of the composition effect. Overall, the average covariance has played a relevant role in lowering volatility. Evidence also indicates that there is a regime shift near the years 1992-3, while both European Union membership and participation in the euro area contribute towards smoothing the economy. The decreasing path of volatility was slightly reversed after the country became a euro area member.engMacroeconomic volatilityOutput composition effectCorrelation effectjournal article