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Modeling Cyclical Asymmetries in European Imports

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  • José Cancelo
  • Estefanía Mourelle

Abstract

This paper applies smooth transition models to capture the nonlinear behavior in the imports data of six major European economies and to assess whether such nonlinearities are related to business cycle asymmetries. Two classes of switch between regimes are considered: endogenously determined transition that assumes nonlinearities are generated by idiosyncratic components specific to foreign trade, and exogenous transition based on GDP growth as a more direct indicator of the cyclical state of the economy. The results support the proposition that the dynamics of imports are nonlinear. In Belgium, France, Spain, and the United Kingdom, regimes change over the business cycle, while in Germany and Italy the switch between regimes is endogenous. National characteristics play a role in defining the position of extreme regimes, the smoothness of the transition, and local dynamics within each state. Copyright International Atlantic Economic Society 2005

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Bibliographic Info

Article provided by Springer in its journal International Advances in Economic Research.

Volume (Year): 11 (2005)
Issue (Month): 2 (May)
Pages: 135-147

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Handle: RePEc:kap:iaecre:v:11:y:2005:i:2:p:135-147

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Web page: http://www.springerlink.com/link.asp?id=112112

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Keywords: C32; E32; F15;

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References

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  7. Sensier, Marianne & Osborn, Denise R & Ocal, Nadir, 2002. " Asymmetric Interest Rate Effects for the UK Real Economy," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(4), pages 315-39, September.
  8. Dipendra Sinha & Tapen Sinha, 2000. "An aggregate import demand function for greece," Atlantic Economic Journal, International Atlantic Economic Society, vol. 28(2), pages 196-209, June.
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Cited by:
  1. Faria, João Ricardo & Cuestas, Juan Carlos & Mourelle, Estefanía, 2010. "Entrepreneurship and unemployment: A nonlinear bidirectional causality?," Economic Modelling, Elsevier, vol. 27(5), pages 1282-1291, September.
  2. Stephen Dobson & John Goddard, 2008. "Strategic behaviour and risk taking in football," Working Papers 2008/7, Nottingham Trent University, Nottingham Business School, Economics Division.
  3. José Cancelo, 2007. "Cyclical Asymmetries in Unemployment Rates: International Evidence," International Advances in Economic Research, Springer, vol. 13(3), pages 334-346, August.
  4. Estefanía Mourelle & José Cancelo, 2009. "Nonlinearities and the Business Cycle in Spanish Imports: A Smooth Transition Regression Approach," International Advances in Economic Research, Springer, vol. 15(2), pages 245-259, May.

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