Do Institutional Changes Affect Business Cycles? Evidence from Europe

Banco de Espana Working Paper No. 0921

40 Pages Posted: 21 Jul 2009

See all articles by Fabio Canova

Fabio Canova

BI Norwegian Business School

Matteo Ciccarelli

European Central Bank (ECB)

Eva Ortega

Bank of Spain, DG Economics, Statistics and Research

Date Written: October 1, 2009

Abstract

We study the effects that the Maastricht treaty, the creation of the ECB, and the Euro changeover had on the dynamics of European business cycles using a panel VAR and data from ten European countries - seven from the Euro area and three outside of it. There are slow changes in the features of business cycles and in the transmission of shocks. Time variations appear to be unrelated to the three events of interest and instead linked to a process of European convergence and synchronization.

Keywords: business cycles, European Monetary Union, Panel VAR, structural changes

JEL Classification: C15, C33, E32, E42

Suggested Citation

Canova, Fabio and Ciccarelli, Matteo and Ortega, Eva, Do Institutional Changes Affect Business Cycles? Evidence from Europe (October 1, 2009). Banco de Espana Working Paper No. 0921, Available at SSRN: https://ssrn.com/abstract=1436365 or http://dx.doi.org/10.2139/ssrn.1436365

Fabio Canova (Contact Author)

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

Matteo Ciccarelli

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Eva Ortega

Bank of Spain, DG Economics, Statistics and Research ( email )

Alcala 50
Madrid, 28014
Spain

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