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Do Institutions and Culture Matter for Business Cycles?

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  • Sumru Altug

    ()
    (Koc University and CEPR)

  • Fabio Canova

    (EUI, ICREA-UPF, CREMED, CREI, and CEPR)

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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File URL: http://eaf.ku.edu.tr/sites/eaf.ku.edu.tr/files/erf_wp_1217.pdf
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Bibliographic Info

Paper provided by Koc University-TUSIAD Economic Research Forum in its series Koç University-TUSIAD Economic Research Forum Working Papers with number 1217.

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Length: 35 pages
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:koc:wpaper:1217

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Keywords: Business cycles; institutions; culture; Mediterranean countries; synchronization.;

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References

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Citations

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Cited by:
  1. Canova, Fabio & Ciccarelli, Matteo, 2012. "ClubMed? Cyclical fluctuations in the Mediterranean basin," Journal of International Economics, Elsevier, vol. 88(1), pages 162-175.
  2. Dirk Bursian & Alfons Weichenrieder & Jochen Zimmer, 2013. "Trust in Government and Fiscal Adjustments," CESifo Working Paper Series 4310, CESifo Group Munich.
  3. 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, vol. 36(10), pages 1534-1550.
  4. Sumru Altug & Fabio Canova, 2012. "Do Institutions and Culture Matter for Business Cycles?," Koç University-TUSIAD Economic Research Forum Working Papers 1217, Koc University-TUSIAD Economic Research Forum.
  5. Canova, Fabio & Dallari, Pietro, 2013. "How important is tourism for the international transmission of cyclical fluctuations? Evidence from the Mediterranean," Working Paper Series 1553, European Central Bank.

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