In recent years, studies of the euro area business cycle have flourished. However, national statistics have only recently been harmonized and aggregate statistics have only been available for a short period of time. Clearly, there is a need to establish stylized facts for the euro area economies and European Monetary Union gives an opportunity to analyse questions such as whether the loss of independence in the conduct of monetary policy has affected national business cycles. A new Volume published by the Centre for Economic Policy Research (CEPR), ‘The Euro Area Business Cycle: stylized facts and measurement issues’ presents four papers by leading economists that examine different aspects of business cycle measurement for the euro area. CEPR Research Fellow Lucrezia Reichlin, who will begin as head of research at the European Central Bank in February 2005, has edited the Volume.
In their Paper ‘Euro Area and US Recessions, 1970-2003’, Domenico Giannone (ECARES, Université Libre de Bruxelles) and Lucrezia Reichlin (ECARES, Université Libre de Bruxelles and CEPR) analyse the relation between (1) the level cycle: the level of economic activity, and (2) the growth cycle: the rate of economic growth. They use both definitions of economic activity to compare the behaviour of the economies of the euro area and the United States. The Paper starts from the observation that, although level cycles are strikingly similar in the euro area and the US, the growth rate of output in the euro area is less volatile than in the US and more protracted. This implies that the effect of an economic shock from outside the euro area lasts longer than in the US. Giannone and Reichlin use a statistical model of joint US-euro area output behaviour that is able to simulate characteristics of both definitions of economic activity. The model implies that a world technological shock would be immediately absorbed by the US economy but would take longer to be absorbed by the euro area economies. The euro area does eventually catch up with the US but this takes around ten years.
The authors also analyse consumption and conclude that the welfare cost associated with output fluctuations is likely to be larger in the euro area than the US. The Paper provides food for thought for understanding the causes of differences in the economic performance of the euro area and the US and the role played by policy.
Robbie Lonie | alfa
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26.01.2017 | California Institute of Technology
Plants and algae use the enzyme Rubisco to fix carbon dioxide, removing it from the atmosphere and converting it into biomass. Algae have figured out a way to increase the efficiency of carbon fixation. They gather most of their Rubisco into a ball-shaped microcompartment called the pyrenoid, which they flood with a high local concentration of carbon dioxide. A team of scientists at Princeton University, the Carnegie Institution for Science, Stanford University and the Max Plank Institute of Biochemistry have unravelled the mysteries of how the pyrenoid is assembled. These insights can help to engineer crops that remove more carbon dioxide from the atmosphere while producing more food.
A warming planet
Our brains house extremely complex neuronal circuits, whose detailed structures are still largely unknown. This is especially true for the so-called cerebral cortex of mammals, where among other things vision, thoughts or spatial orientation are being computed. Here the rules by which nerve cells are connected to each other are only partly understood. A team of scientists around Moritz Helmstaedter at the Frankfiurt Max Planck Institute for Brain Research and Helene Schmidt (Humboldt University in Berlin) have now discovered a surprisingly precise nerve cell connectivity pattern in the part of the cerebral cortex that is responsible for orienting the individual animal or human in space.
The researchers report online in Nature (Schmidt et al., 2017. Axonal synapse sorting in medial entorhinal cortex, DOI: 10.1038/nature24005) that synapses in...
Whispering gallery mode (WGM) resonators are used to make tiny micro-lasers, sensors, switches, routers and other devices. These tiny structures rely on a...
Using ultrafast flashes of laser and x-ray radiation, scientists at the Max Planck Institute of Quantum Optics (Garching, Germany) took snapshots of the briefest electron motion inside a solid material to date. The electron motion lasted only 750 billionths of the billionth of a second before it fainted, setting a new record of human capability to capture ultrafast processes inside solids!
When x-rays shine onto solid materials or large molecules, an electron is pushed away from its original place near the nucleus of the atom, leaving a hole...
For the first time, physicists have successfully imaged spiral magnetic ordering in a multiferroic material. These materials are considered highly promising candidates for future data storage media. The researchers were able to prove their findings using unique quantum sensors that were developed at Basel University and that can analyze electromagnetic fields on the nanometer scale. The results – obtained by scientists from the University of Basel’s Department of Physics, the Swiss Nanoscience Institute, the University of Montpellier and several laboratories from University Paris-Saclay – were recently published in the journal Nature.
Multiferroics are materials that simultaneously react to electric and magnetic fields. These two properties are rarely found together, and their combined...
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