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Sectoral and Industrial Business Cycles

Author

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  • Everts, Martin

Abstract

This article calculates the sectoral and industrial business cycles by means of the band-pass filters by Baxter and King (1999) and Christiano and Fitzgerald (2003), to subsequently analyze the correlations between the sectors and industries and the overall economy. It can be shown that the correlations between the business cycles of the sectors and industries and the overall economy differ strongly. The agriculture sector and the industries mining and quarrying, electricity and education for example exhibit almost no correlation with the overall economy; The wholesale and retail as well as the transport industry on the other hand have a high correlation. By means of an analysis of the leading and lagging correlations it can be shown that the wholesale and retail industry leads the overall economy by two quarters. Thus, the wholesale and retail industry can be used as an indicator for the development of the overall economy.

Suggested Citation

  • Everts, Martin, 2006. "Sectoral and Industrial Business Cycles," MPRA Paper 1176, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:1176
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    File URL: https://mpra.ub.uni-muenchen.de/1176/1/MPRA_paper_1176.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Business Cycle; Correlation; Band-Pass Filter; Sectoral Cycles; Industrial Cycles; Cross-Country Correlation; Monetary Policy; Forecasting;
    All these keywords.

    JEL classification:

    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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