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Do Institutions and Culture Matter for Business Cycles?

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  • Sumru Altug
  • Fabio Canova

Abstract

We examine the relationship between institutions, culture and cyclical fluctuations for a sample of 45 European, Middle Eastern and North African countries. Better governance is associated with shorter and less severe contractions and milder expansions. Certain cultural traits, such as lack of acceptance of power distance and individualism, are also linked business cycle features. Business cycle synchronization is tightly related to similarities in the institutional environment. Mediterranean countries conform to these general tendencies.

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Bibliographic Info

Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 627.

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Date of creation: Apr 2012
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Handle: RePEc:bge:wpaper:627

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Keywords: business cycles; institutions; culture; Mediterranean countries; synchronization;

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Citations

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Cited by:
  1. Sumru Altug & Fabio Canova, 2012. "Do Institutions and Culture Matter for Business Cycles?," Working Papers 627, Barcelona Graduate School of Economics.
  2. Altug, Sumru & Tan, Barış & Gencer, Gözde, 2012. "Cyclical dynamics of industrial production and employment: Markov chain-based estimates and tests," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 36(10), pages 1534-1550.
  3. Bursian, Dirk & Weichenrieder, Alfons J. & Zimmer, Jochen, 2013. "Trust in government and fiscal adjustments," SAFE Working Paper Series 22, Research Center SAFE - Sustainable Architecture for Finance in Europe, Goethe University Frankfurt.
  4. Canova, Fabio & Dallari, Pietro, 2013. "How important is tourism for the international transmission of cyclical fluctuations? Evidence from the Mediterranean," Working Paper Series, European Central Bank 1553, European Central Bank.
  5. Fabio Canova & Matteo Ciccarelli, 2011. "ClubMed? Cyclical fluctuations in the Mediterranean basin," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 1258, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2012.
  6. Fatma Pinar Erdem & Erdal Ozmen, 2014. "Exchange Rate Regimes and Business Cycles: An Empirical Investigation," ERC Working Papers, ERC - Economic Research Center, Middle East Technical University 1404, ERC - Economic Research Center, Middle East Technical University, revised Jun 2014.

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