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Business cycle patterns in European regions

Author

Listed:
  • Ana Gómez-Loscos

    (Banco de España)

  • M. Dolores Gadea

    (University of Zaragoza)

  • Eduardo Bandres

    (University of Zaragoza
    Funcas)

Abstract

The aim of this paper is threefold. First, we analyze the comovements of business cycles in European regions. Second, we date these business cycles and identify clusters of regions with similar business cycle behavior, using Finite Mixture Markov models. Third, we develop a new index to measure within-country homogeneity. We find that comovement among regions is, on average, quite low, although it increased during the convergence process prior to the euro cash and after the onset of the Great Recession. We identify five different groups of European regions. We also find heterogeneity in the size of border effects.

Suggested Citation

  • Ana Gómez-Loscos & M. Dolores Gadea & Eduardo Bandres, 2020. "Business cycle patterns in European regions," Empirical Economics, Springer, vol. 59(6), pages 2639-2661, December.
  • Handle: RePEc:spr:empeco:v:59:y:2020:i:6:d:10.1007_s00181-019-01743-z
    DOI: 10.1007/s00181-019-01743-z
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    More about this item

    Keywords

    Business cycle dating; Comovements; Clusters; Regions; Finite Mixture Markov models;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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