Browsing by Subject "C65"

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  • Crowley, Patrick M.; Schultz, Aaron (2010)
    Bank of Finland Research Discussion Papers 16/2010
    Convergence and synchronisation of business and growth cycles are important issues in the efficient formulation of euro area economic policies, and in particular European Central Bank (ECB) monetary policy. Although several studies in the economics literature address the issue of synchronicity of growth within the euro area, this is the first to address the issue using cross recurrence analysis. The main findings are that member state growth rates had largely converged before the introduction of the euro, but there is a wide degree of different synchronisation behaviours which appear to be non-linear in nature. Many of the euro area member states display what is termed here intermittency in synchronization, although this is not consistent across countries or members of the euro area. These differences in synchronization behaviors could introduce further challenges in managing the country-specific effects of the common monetary policy in the euro area. Keywords: Euro area, business cycles, growth cycles, recurrence plots, nonstationarity, complex systems, surrogate analysis. JEL classification numbers: C65, E32, F15 Note: A previous shortened version of the second part of this paper was previously published as Crowley (2008).
  • Crowley, Patrick M.; Lee, Jim (2005)
    Bank of Finland Research Discussion Papers 12/2005
    This article analyses the frequency components of European business cycles using real GDP by employing multiresolution decomposition (MRD) with the use of maximal overlap discrete wavelet transforms (MODWT).Static wavelet variance and correlation analysis is performed, and phasing is studied using co-correlation with the euro area by scale.Lastly dynamic conditional correlation GARCH models are used to obtain dynamic correlation estimates by scale against the EU to evaluate synchronicity of cycles through time. The general findings are that euro area members fall into one of three categories: i) high and dynamic correlations at all frequency cycles (eg France, Belgium, Germany), ii) low static and dynamic correlations, with little sign of convergence occurring (eg Greece), and iii) low static correlation but convergent dynamic correlations (eg Finland and Ireland). Key words: business cycles, growth cycles, European Union, multiresolution analysis, wavelets, co-correlation, dynamic correlation JEL Classification numbers: C65, E32, O52
  • Crowley, Patrick M.; Maraun, Douglas; Mayes, David (2006)
    Bank of Finland Research Discussion Papers 18/2006
    Published in Journal of Business Cycle Measurement and Analysis, No. 4, Volume: 2008, Issue 1: 63-95
    Using recent advances in time-varying spectral methods, this research analyses the growth cycles of the core of the euro area in terms of frequency content and phasing of cycles.The methodology uses the continuous wavelet transform (CWT) and also Hilbert wavelet pairs in the setting of a non-decimated discrete wavelet transform in order to analyse bivariate time series in terms of conventional frequency domain measures from spectral analysis.The findings are that coherence and phasing between the three core members of the euro area (France, Germany and Italy) have increased since the launch of the euro. Key words: time-varying spectral analysis, coherence, phase, business cycles, EMU, growth cycles, Hilbert transform, wavelet analysis JEL classification numbers: C19, C63, C65, E32, E39, E58, F40
  • Bask, Mikael (2007)
    Bank of Finland Research Discussion Papers 19/2007
    A DSGE model with a Taylor rule is augmented with an evolutionary switching between technical and fundamental analyses in currency trade, where the fractions of these trading tools are determined within the model. Then, a shock hits the economy. As a result, chaotic dynamics and long swings may occur in the exchange rate, which are appealing features of the model given existing empirical evidence on chaos and long swings in exchange rate fluctuations. Keywords: chaotic dynamics, foreign exchange, fundamental analysis, monetary policy, technical analysis JEL classification numbers: C65, E32, E44, E52, F31
  • Acemoglu, Daron; Akcigit, Ufuk; Hanley, Douglas; Kerr, William R. (2015)
    Bank of Finland Research Discussion Papers 26/2015
    We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation–in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several rungs to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model’s quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy makes heavy use of research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policies.