Working Paper: CEPR ID: DP7376
Authors: Olivier Darn; Laurent Ferrara
Abstract: In addition to quantitative assessment of economic growth using econometric models, business cycle analyses have been proved to be helpful to practitioners in order to assess current economic conditions or to anticipate upcoming fluctuations. In this paper, we focus on the acceleration cycle in the euro area, namely the peaks and troughs of the growth rate which delimitate the slowdown and acceleration phases of the economy. Our aim is twofold: First, we put forward a reference turning point chronology of this cycle on a monthly basis, based on gross domestic product and industrial production index. We consider both euro area aggregate level and country specific cycles for the six main countries of the zone. Second, we come up with a new turning point indicator, based on business surveys carefully watched by central banks and short-term analysts, in order to follow in real-time the fluctuations of the acceleration cycle.
Keywords: acceleration cycle; business surveys; dating chronology; euro area; turning point indicator
JEL Codes: C22; C52; E32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| industrial performance (L69) | overall economic activity (E66) |
| survey responses (C83) | economic performance (P17) |
| turning point chronology (N00) | understanding economic fluctuations (E32) |
| acceleration and deceleration phases (Y20) | current economic conditions (E66) |