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The Centre for Economic Policy Research has formed
a committee to set the dates of the euro area business cycle.
Its mission is to establish the chronology of recessions and expansions
of the 11 original euro area member countries plus Greece for 1970-1998 and
of the euro area as a whole from 1999 onwards. The euro area currently includes
Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
Netherlands, Portugal and Spain.
In determining the chronology of the euro area business cycle,
the CEPR Business Cycle Dating Committee has decided to adopt a
definition of a recession similar to that used by the National Bureau
of Economic Research (NBER), which has for many years dated the US business
cycle. We have had to adapt the NBER definition, however, to reflect specific
features of the euro area. Thus the Committee defines a recession as a significant
decline in the level of economic activity, spread across the economy of the euro area,
usually visible in two or more consecutive quarters of negative growth in GDP,
employment and other measures of aggregate economic activity for the euro area
as a whole, and reflecting similar developments in most countries. A recession
begins just after the economy reaches a peak of activity and ends when the
economy reaches its trough. Between trough and peak, the economy is formally
in an expansion; between peak and trough it is in a recession. In both cases,
growth rates may be very low.
The CEPR Committee's task is significantly different from that of the NBER.
The euro area groups together a set of different countries. Although subject
to a common monetary policy since 1999, they even now have heterogeneous
institutions and policies. Moreover, European statistics are of uneven quality,
long time series are not available, and data definitions differ across countries and sources.
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