Some Stylised Facts on the Euro Area Business Cycle

44 Pages Posted: 7 Feb 2003

Date Written: December 2001

Abstract

This paper presents stylised facts about the business cycle of the euro area. The results suggest that the stylised facts for the euro area economy and the US are very similar. The magnitude of the fluctuations in consumption, investment, prices, inflation, interest rate, monetary aggregates relative to the fluctuations of GDP are very similar in the two monetary unions. There is also high synchronicity of the national cycles and the euro area aggregate cycle. This synchronicity is observed for the main GDP components as well as for interest rates and it is particularly high for the largest countries of the euro area and for countries of the core ERM. These results are not sensitive to a different aggregation method chosen to build euro area aggregates. However, we do find differences between the euro area and the member countries when looking at what variables are predicting inflation or GDP.

Keywords: Euro area, business cycle, monetary policy

JEL Classification: E42, E50

Suggested Citation

Agresti, Anna Maria and Mojon, Benoit, Some Stylised Facts on the Euro Area Business Cycle (December 2001). Available at SSRN: https://ssrn.com/abstract=356301 or http://dx.doi.org/10.2139/ssrn.356301

Anna Maria Agresti (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Benoit Mojon

Banque de France ( email )

Paris
France

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