 “Out of Sync”: The Breakdown of Economic Sentiment Cycles in the EUDimitrios Thomakos and Fotis Papailias Review of International Economics, 2014, vol. 22, issue 1, 131-150 Abstract: Empirical evidence is presented about the properties of economic sentiment cycle synchronization for Germany, France and the UK and they are compared with the “crisis” countries Italy, Spain, Portugal and Greece. Instead of using output data it is preferred to focus on the economic sentiment indicator (ESI), a forward-looking, survey-based variable consistently available from 1985. The cyclical nature of the ESI allowed the analyis of the presence or not of synchronicity among country pairs before and after the onset of the financial crisis. The results show that ESI movements were mostly synchronous before 2008 but they exhibit a breakdown after 2008, with this feature being more prominent in Greece. It is also found that, after the political maneuvering of the past two years, a cycle re-integration or re-synchronization is on the way. An analysis of the evolution of the synchronicity measures indicates that they can potentially be used to identify sudden phase breaks in ESI co-movement and they can offer a signal as to when the EU economies are getting “in” or “out of sync”. Date: 2014 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:reviec:v:22:y:2014:i:1:p:131-150 Ordering information: This journal article can be ordered from Access Statistics for this article Review of International Economics is currently edited by E. Kwan Choi More articles in Review of International Economics from Wiley Blackwell |
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