Marco Lombardi, Marianna Riggi, Eliana Viviano, 22 December 2020

The Phillips curve – the relationship between economic activity and inflation – has become elusive since the 1980s in most advanced economies, including the euro area. This column argues that an important driver of this phenomenon is the erosion of workers’ bargaining power, which induced firms to react to business cycle fluctuations by adjusting the number of workers rather than hours worked per employee.

Stefania Albanesi, 07 October 2019

The US economy has been hampered over the last four decades by three trends: the productivity slowdown, the Great Moderation, and jobless recoveries. Economists seeking to explain these phenomena have generally looked to the impact that technological change has on labour demand. This column proposes an alternative explanation: the rise and stabilisation of women’s participation in the workforce, one of the most notable developments in the post-war US. Excluding gender differences in aggregate models of the US economy obscures our understanding of business cycle behaviour and economic performance.

Zhen Huo, Andrei Levchenko, Nitya Pandalai-Nayar, 17 August 2019

The international co-movements of business cycles is a key determinant of trade and monetary policy, but the ways in which it is affected by technology, TFP, and trade openness are not fully understood. This column shows how such co-movements are affected by trade linkages and technology. It finds that non-technology shocks contribute more to international co-movement than TFP shocks, and that transmission plays a notable but small part in co-movements.

Mónica Correa-López, Beatriz de Blas, 23 April 2019

Since the end of WWII, advanced economies have experienced long-lasting swings in economic activity. This column takes a look at the historical data and finds that, over the medium term, output and investment fluctuations among European countries have been even more volatile and persistent than in the US. It also reveals that, by diffusing embodied technology through trade inintermediates, large US firms appear to drive Europe's output over the medium term. 


Growth in 2019 is expected to slow down in OECD countries, with expansions across major advanced economies approaching their record length in the postwar period. What economy will business-cycle policies face at the next downturn? How has the economy changed over the years since the Great Recession? Which economic and financial trends will reshape the propagation of shocks and the allocation of risks through the economy? The meeting will be the sixth event in the annual conferences series New Developments in Business Cycle Analysis, bringing together economists from academia and central banks.

Call for papers deadline: March 24th, 2019

Kristín Helga Birgisdóttir, Arna Hauksdóttir, Christopher J. Ruhm, Tinna Laufey Ásgeirsdóttir, 27 January 2019

Studies on the relationship between business cycles and health have come up with conflicting results. This column uses the case of Iceland’s economic collapse in 2008 to argue that the context and nature of macroeconomic fluctuations are key. Looking at the Icelandic business cycle in general suggests that hard economic times appear to be good for heart health, but the collapse, which was particularly dramatic and sudden, increased the incidence of ischemic heart disease. 

Christopher Busch, David Domeij, Fatih Guvenen, Rocío Madera, 17 October 2018

Workers experience income volatility over their lifetime due to changes in both individual and macroeconomic conditions. Using panel data from the US, Germany, and Sweden, this column analyses how the probability of income losses and gains changes systematically over the business cycle. Downside risk increases in recessions, while upside chance is reduced. However, tax and transfer programmes blunt some of the largest declines in incomes in recessions.

Eric Bond, Mario Crucini, Tristan Potter, Joel Rodrigue, 27 September 2018

The Trump administration’s recent tariff increases have prompted comparisons to interwar tariff history. This column investigates tariffs during this period, drawing out lessons on their macroeconomic impacts for the US and its trade partners. The recessionary impact of recent tariffs is likely to be smaller and less widespread than those imposed during the interwar period, provided that tariff levels don’t escalate too dramatically through retaliation.

Rüdiger Bachmann, Peter Zorn, 02 March 2018

A long-standing question in macroeconomic research pertains to the causes of business cycle fluctuations in macroeconomic variables like output and investment. This column uses survey data from the German manufacturing sector to show that aggregate variations in investment and output are mainly due to aggregate demand shocks. These shocks resemble swings in business and consumer sentiment but, for the most part, have no obvious relation to macroeconomic policy.

Rüdiger Bachmann, Christian Bayer, Christian Merkl, Stefan Seth, Heiko Stüber, Felix Wellschmied, 01 November 2017

Many establishments both hire and lay off within a short time window, resulting in ‘churn’. This column uses a newly constructed dataset to show that the rate of churn in Germany is high and can be up to 40% greater in booms compared to recessions. Both establishments that are shrinking and those that are growing hire more and lay off more in booms than in recessions.

Giancarlo Corsetti, Luca Dedola, Marek Jarociński, Bartosz Maćkowiak, Sebastian Schmidt, 23 October 2017

Business cycle stabilisation policy in the Eurozone may end up being far from optimal if member states must tighten fiscal policy amid weak economic activity while monetary policy is constrained by the lower bound on nominal interest rates. This column surveys the recent literature formulating practical lessons for the Eurozone’s ability to implement an effective monetary–fiscal policy mix.

Thomas Drechsel, Silvana Tenreyro, 09 October 2017

Emerging economies, particularly those dependent on commodity exports, are prone to highly disruptive economic cycles. This column points to fluctuations in international commodity prices as a key driver of these cycles. Using a small open economy model, it quantitatively assesses their importance for Argentina’s economy, and finds that they explain 38%, 42%, and 61% of the variance of output, consumption and investment growth, respectively.

Nauro Campos, Jarko Fidrmuc, Iikka Korhonen, 26 September 2017

The debate about the future of the Economic and Monetary Union entails a careful examination of the costs and benefits of the European single currency. This column takes stock of the empirical evidence on the euro’s effects on business cycle synchronisation. We find that synchronisation across European countries increased by 50% after 1999 (the year the euro was introduced) and that this increase was more pronounced in euro area countries.

Refet Gürkaynak, Philippe Weil, 24 August 2017

This column presents the first bi-annual report from CEPR’s Euro Area Business Cycle Dating Committee on the state of the Eurozone business cycle. The main findings are that the Eurozone expansion is continuing slowly, but is creating employment at a rapid pace; the recovery is commensurate with the US recovery once the Eurozone’s double-dip sovereign debt recession is factored in; and the heterogeneity in the pace of recovery of individual member countries is driven by the heterogeneity in their recessions.

Massimiliano Marcellino, Angela Abbate, 04 February 2017

Exchange rates are important contributors to business cycle fluctuations in open economies. Forecasting exchange rates is not an easy task, however, perhaps due to the instability of their relationship with economic drivers. This column introduces a model that also allows for changing volatility when forecasting exchange rates. Modelling time variation in the cross-rate relationships, and in the volatilities of the shocks hitting the economic system, significantly improves forecasts.

Luca Dedola, Luc Laeven, 15 November 2016

In September 2016, the ECB held its first Annual Research Conference. This column surveys the contributions to the conference, which brought together policymakers and academics from around the world to promote discussion of topics at the forefront of monetary and financial economic research. Nobel laureate Eric Maskin gave the keynote lecture, addressing whether fiscal policy should be set by politicians, and the conference included eight further presentations and a panel discussion on monetary policy and financial stability.

Aida Caldera, Alain de Serres, Naomitsu Yashiro, 04 September 2016

Structural reforms can have adverse effects in the short run if implemented under weak macroeconomic conditions. This column argues that prioritising reform measures that bring short-term benefits even in a bad conjuncture, and packaging them to benefit from reform complementarities across product and labour markets, remains the most promising growth strategy, especially in the post-Global Crisis context

Raju Huidrom, M. Ayhan Kose, Franziska Ohnsorge, 13 August 2016

Fiscal multipliers tend to be larger when the fiscal position of governments is stronger. This column argues that the link between fiscal multipliers and fiscal positions is independent of the business cycle. Although multipliers are generally larger in recessions, they are smaller during times of high debt, even during recessions, relative to what they would be if government debt were lower. 

Paul De Grauwe, Yuemei Ji, 07 June 2016

There is a high degree of correlation between the business cycles of different countries. This is particularly the case in the Eurozone, but also among industrialised countries outside of the Eurozone. Using a two-country behavioural macroeconomic model, this column shows that the main channel for the synchronisation of business cycles is the propagation of ‘animal spirits’ – waves of optimism and pessimism that become correlated internationally. 

Nauro Campos, Corrado Macchiarelli, 03 March 2016

There seems to be a robust consensus that the relationship between the countries in the EU that use the euro as their currency (‘euro-ins’) and those that do not (‘euro-outs’) is the most important of the four areas in the ‘new settlement’ between the UK and the EU. This column presents new econometric estimates showing that, after the introduction of the euro, the UK and Eurozone business cycles became significantly more synchronised. It is likely this upsurge in synchronisation increased the costs of a potential UK exit from the EU. 


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