Working Paper Series no. 239: Identification of slowdowns and accelerations for the euro area economy.

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.

Olivier Darné and Laurent Ferrara
June 2009

Classification JEL : C22, C52, E32.

Keywords : Acceleration cycle, Euro area, Dating chronology, Turning point indicator, Business surveys.