IDEAS home Printed from https://ideas.repec.org/p/men/wpaper/26_2012.html
   My bibliography  Save this paper

Continuing Integration in Europe? Some empirical evidence on European industrial production cycle

Author

Listed:
  • Petr Rozmahel

    () (Department of Economics, Faculty of Business and Economics, Mendel University in Brno)

  • Nikola Najman

    () (Department of Economics, Faculty of Business and Economics, Mendel University in Brno)

Abstract

The paper deals with assessing the common trends in business cycle similarity and convergence in Europe. The main goal of the paper is to identify common cyclical co-movements and trends in convergence among the European countries so that the emerging European business cycle could be identified. Concerning the factors of business cycle, the research question of the paper is based on assumption that the integration effects are so dominant to bring the European cycle into existence. Also a potential influence of a global crisis on European and world business cycles is examined in the paper. The industrial production index is used to approximate business cycles. Hodrick-Prescott filter, Christiano-Fitzgerald filter and first differencing were used to dissect the cyclical components and identified the cycles in the data. The common co-movements, trends of convergence and divergence are identified using correlation analysis. Particularly, actual cross correlation and historical correlation in separated subsequent periods is applied in the analysis. The results do not provide an evidence of emerging European business cycle contrary to US cycle. The global economic crises was identified as a kind of negative symmetric shock pushing all major economies towards the recession phase of the cycle und thus increasing similarity. The results also shed some light on an influence of different detrending techniques when dissecting the cycles from the input macroeconomic time series.

Suggested Citation

  • Petr Rozmahel & Nikola Najman, 2012. "Continuing Integration in Europe? Some empirical evidence on European industrial production cycle," MENDELU Working Papers in Business and Economics 2012-26, Mendel University in Brno, Faculty of Business and Economics.
  • Handle: RePEc:men:wpaper:26_2012
    as

    Download full text from publisher

    File URL: http://ftp.mendelu.cz/RePEc/men/wpaper/26_2012.pdf
    File Function: Full text
    Download Restriction: no

    More about this item

    Keywords

    business cycle; correlation; convergence; Eurozone; industrial production;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F15 - International Economics - - Trade - - - Economic Integration
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:men:wpaper:26_2012. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Luděk Kouba). General contact details of provider: http://edirc.repec.org/data/femencz.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.