Euro area business cycle dating latinadating org
To this end, we take advantage of the literature on synchronization of Euro-Area business cycles (Mundell ).In particular, we use expectation surveys and Markov Switching models to show that data alerted from heterogeneous consequences coming from a future crisis.For instance, the Sovereign crisis had dissimilar impacts across European nations.While some countries had a high and persistent unemployment rate during several years, e.g.This evidence is against the achievement of an optimum currency area.Thus, important differences in the evolution of the economic activity of Spain, Germany, Euro Area and European Union are exposed in this paper. A business cycle phase corresponds to the evolution of the economic activity between two consecutive maximum values of an economic series that contains the main characteristics of the economy.We use a Markov Switching Autoregressive (MS-AR henceforth) model, which allows us to identify and characterize a non-linear behavior.) considers that the economy can be described by two states (expansion and recession), which can be modeled as a switching regime of a stochastic process of the output growth. This probability is a measure of persistence of the business cycle phase.
An economic recession represents the main fear especially when the effects of the Subprime crisis are fresh on mind of agents.
For this purpose, we use information pre Sovereign-crisis in order to characterize business cycle phases.
Then, we are able to discuss whether this characterization coincides with the empirical evidence about the recession phases observed for these economies.
Spain, others had minimums effects on the market labor, e.g. In such an environment, tools which help to characterize the different features of recession phases across Euro-Area countries, which seem to have marked differences, are useful to anticipate deeps impacts of future crises.
The objective of this paper is to provide a tool, which can be useful to characterize recession phases of Euro-Area economies.