Are Euro-Area expectations about recession phases effective to anticipate consequences of economic crises?

• Main Authors: Marco Rubilar-González, Gabriel Pino
• Format: Article
• Language: English
• Published: SpringerOpen 2017-12-01
• Series: SERIEs: Journal of the Spanish Economic Association
• Subjects: Business cycle phases; Expectations; Economic Sentiment Indicator
• Online Access: http://link.springer.com/article/10.1007/s13209-017-0170-0

Abstract By using the Economic Sentiment Indicator and Autoregressive Markov Switching models, this paper provides an effective tool to identify and characterize expectations of business cycle phases for Germany, Spain, the Euro Area, and the European Union. This information is useful for policy makers who can focus their efforts on strengthening economies identified as more sensitive to international disturbances. Our results also reveal a lack of synchronization of the expectations across the Euro-Area. This also takes importance for policy implications given common public policies can have undesired impacts across the different Euro-Area economies.