For the well-functioning of a common currency, convergence of business cycles in participating is of considerable importance. In the absence of convergence, monetary policy will not satisfy the needs of all, and -even worse- may itself become a significant source of further divergence. Against this background, the aim of this project is to assess the degree of business cycle convergence in the euro area and the rest of the world and assesses if there has been an effect from the introduction of the euro. In addition, empirical evidence on the determinants of synchronization and convergence will be provided.