New
Approaches to the Study of Economic Fluctuations
Training and Mobility of Researchers
Network
Summary
A number of new approaches to the analysis of fluctuations have emerged recently in the theoretical literature, which highlight the roles played by the heterogeity of firms and households, rigidities in price and wage adjustment, and externalities and multiple equilibria.There is, however, little empirical evidence on the importance of these factors in explaining fluctuations at the levels of the nation, the region, the household and the firm. This Network is developing new statistical methods suitable for extracting both dynamic and cross-sectional information and will apply these techniques to newly available datasets.
The project brings together eight leading institutions from seven EU countries to undertake three connected lines of research: to study the aggregate characteristics of the European business cycle with the goal of establishing the ‘main facts’ (dating of turning points, co-movements between aggregates in different countries, possible asymmetries of expansions and recessions); to use disaggregated data – at the regional, sectoral and firm level – to investigate the link between aggregate behaviour and microdynamics; and to match established cyclical characteristics with the predictions of existing equilibrium macroeconomic models, with the goal of discriminating between different classes of models.
The Network is pursuing a programme of research and training which involves not only the development of new methodologies but also the application of these methodologies to newly available sources of data, in order to gain a better understanding of observed economic fluctuations. The Network has another important goal: in Europe econometric research is often far removed from developments in macroeconomics. The Network therefore aims to foster closer collaboration between econometricians and macroeconomists based in Europe: the selection of the research teams was made with this interdisciplinary objective in mind.
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Summary