Cepr euro area business cycle dating committee
Unlike meteorologists who know the temperature at the top of the Eiffel Tower in real time, economists have no idea, for example, of the level of GDP for the current month or quarter.
The first estimates are released only several months later (e.g.
Thus, the Committee did not report in September 2003 the existence of a recession between 20 even though the data showed a decrease in GDP during that time (but never, it is true, for two consecutive quarters).
It concluded that there had been a prolonged pause during a period of expansion.
Annual growth rates for GDP and trade were filtered using the Hodrick-Prescott method and the results were correlated through the Pearson approach to obtain the degree of similarity between countries with respect to their economic fluctuations.
The results highlight a stronger degree of synchronization during recessions, while in time of economic expansion there are 2 well-defined macro cycles corresponding to each continent: Europe, North America and the emergent Asian cycle.
According to the CEPR’s dating exercise, an expansion is a period in which every aspect of economic activity is growing significantly.
The aim of this research paper is to assess business cycles’ synchronization within the G7, emphasizing the role of the trade channel as a transmission vector.
Is the euro area evolving in concert with the US economy?
The second advantage of this chronology is that establishing it requires an examination of all aspects of economic activity: GDP, of course, but also consumption, investment and especially employment (number of employed persons, number of hours worked).
This was a good move, as subsequent revisions of GDP cancelled these quarters of declining economic activity (see Figure 1). and, since going into recession at that time, it experienced quarterly growth that was slightly positive in the second quarter of 2013.
The first estimate for the third quarter of 2013 will not be known, as mentioned earlier, until 14 November.