Business Cycle Synchronization and Asymmetry in the Eurozone

This code and data replicate the results in the Manuscript ECMODE-D-23-00367R2 "Business Cycle Synchronization and Asymmetry in the European Union" written by Vladimir Arčabić, Irina B. Panovska and Josip Tica. The ReadMe File provides the instructions for replicating the results. The user will need RATS version 10.0 and Stata version 17 to replicate the main results. Other than that, R version 4.1.3 and Gauss version 19 or later are required to replicate results regarding principal component, individual nonlinear output gaps, and the Phillips curve coherent output gap and its weights. It will take up to 15 minutes to replicate the main results.

Data sources: Quarterly seasonally adjusted data for real GDP, inflation, employment, and the unemployment rate are obtained from the Eurostat and OECD databases. Data and sources are explained in detail in the paper in section 3.1 Data. The raw data are saved in Excel files Data - GDP.xlsx, Data - Employment.xlsx, Data - Unemployment.xlsx, and Data - Inflation.xlsx in Linear gaps estimation folder and in the file Data_GDP_R1.xlsx in the Nonlinear gaps estimation folder. All data is publicly available and obtained from EUROSTAT and OECD.

The replication files are organized in five folders: Linear gaps estimation, Nonlinear gaps estimation, Replication of Figures 3, 4 and 10, Replication of Figures 1-2, 5-8, 13 and Tables 1 and 2, Replication of Figures 9, 11 and 12