The Euro Area Business Cycle PDF Download

In this study a set of basic stylised facts characterising euro area macroeconomic fluctuations are computed with reference to two concepts of the business cycle (classical business cycles and deviation or growth cycles) from 1960 to 2002. These stylised facts, computed on the basis of alternative turning point dating methods and alternative reference measures of the cycle, are discussed and compared to the corresponding ones for the US business cycle. Overall, the study suggests that: i) significant variation of characteristics can be detected across cycles for both fluctuation concepts ; ii) classical business cycles are much less frequent than deviation cycles; iii) the phases of classical cycles tend to be asymmetric, both in terms of duration and amplitude, while regimes of deviation cycles appear to be relatively symmetric; iv) very similar regularities characterise euro area and US fluctuations, one main exception being that the US economy experienced more frequent classical cycles, with a somewhat shorter average duration; v) there is no clear evidence that the duration or amplitude of phases has gradually declined over time, apart from US classical cycle recessions.