Working Paper: CEPR ID: DP9382
Authors: Sumru Altug; Fabio Canova
Abstract: We examine the relationship between macroeconomic, institutional, and cultural indicators and cyclical fluctuations for European, Middle Eastern and North African Mediterranean countries. Mediterranean cycles are different from EU cycles: the duration of expansions is shorter; the amplitude and the output costs of recessions are larger; and cyclical synchronization is smaller. Differences in macroeconomic and institutional indicators partly account for the relative differences in cyclical synchronization. By contrast, differences in cultural indicators account for relative differences in the persistence, the volatility and the synchronization of cyclical fluctuations. Theoretical and policy implications are discussed
Keywords: business cycles; institutions; culture; Mediterranean countries; synchronization
JEL Codes: C32; E32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| macroeconomic indicators (E66) | cyclical synchronization (E32) |
| cultural indicators (Z10) | amplitude of fluctuations (E32) |
| cultural indicators (Z10) | persistence of fluctuations (E32) |
| institutional factors (D02) | cyclical dynamics (E32) |
| governance quality (H11) | business cycle characteristics (E32) |
| cultural values (A13) | amplitude during contractions (E32) |
| cultural attitudes regarding family ties (J12) | output losses during contractions (E23) |
| cultural attributes (Z10) | synchronization of business cycles (F44) |