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Profit dynamics across the largest euro area countries and sectors

Author

Listed:
  • Roma, Moreno
  • Vetlov, Igor
  • Maurin, Laurent

Abstract

This paper explores the behavior of profits in the four largest euro area countries (Germany, France, Italy and Spain) and the euro area as a whole, while at the same time considering three main sectors (manufacturing, construction and services) in each economy over the period 1988–2010. The paper presents stylized facts about profit developments and, applying a vector autoregressive modeling framework, discusses the sensitivity of profits to four distinctive structural shocks (a demand shock, an employment shock, a wage and price mark-up shocks). In addition, it provides the shock decomposition of historical developments in profits across countries and sectors. JEL Classification: C32, E23, E25

Suggested Citation

  • Roma, Moreno & Vetlov, Igor & Maurin, Laurent, 2011. "Profit dynamics across the largest euro area countries and sectors," Working Paper Series 1410, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20111410
    Note: 337417
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    References listed on IDEAS

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    Cited by:

    1. Stéphane Dées & Jochen Güntner, 2014. "Analysing and forecasting price dynamics across euro area countries and sectors: A panel VAR approach," Economics working papers 2014-10, Department of Economics, Johannes Kepler University Linz, Austria.
    2. Lorenzo Esposito & Giuseppe Mastromatteo, 2025. "No More than Double: Can a Single Rule Tame Capitalism?," Economics Working Paper Archive wp_1102, Levy Economics Institute.
    3. Francesc Sastre & Javier Rey-Maquieira & Italo Arbulú, 2017. "The euro crisis, fiscal devaluation, and impacts on the tourism sector in the Spanish economy," Tourism Economics, , vol. 23(4), pages 816-833, June.

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    Keywords

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    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
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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