Empirical data indicate that firms tend to have below-average productivity upon entry and that they tend to experience post-entry productivity growth. I present a New Keynesian model with growth in firm-specific productivity and firm turnover that captures these two phenomena. The model predicts...

The paper presents an estimation of Euroland's foreign trade with the rest of the world based on the exports and imports of the eleven member states of the European Monetary Union according to their Systems of National Accounts (SNA). In order to isolate the trade with the rest of the world from...

The paper investigates a set of possible leading indicators for Euroland's business cycle using aggregated quarterly data. The theoretical plausibility, the behavior at business cycle turning points and the mean leads are analyzed. Furthermore, evidence from cross-correlations and...

Probit models are employed to evaluate leading indicators for Germany's recessions. The predictive power of leading indicators is found to be lower than assumed in previous studies. Although, monetary variables provide the best predictive power for recessions, survey data and order inflows show...

This paper elaborates on the link between financial market volatility and real economic activity. Using monthly data for Germany from 1968 to 1998, we specify GARCH models to capture the variability of stock market prices, of the real exchange rate, and of a long-term and of a short-term rate of...

The economies of Central and Eastern Europe are undergoing a period of rapid structural change. The general pattern confirms to the J-curve anticipated by several observers at the start of transition. This paper conceptualises the J-curve as the result of a combination of two factors. First,...

The paper presents some stylized facts of Euroland's business cycle using aggregated data. The main results are: The determination of turning points in Euroland's business cycle is not very sensitive to the detrending method used, although the level of the recent output gap depends on it....

We identify measures of shocks to total factor productivity and preferences from two real business cycle models and subject them to Granger causality tests to see whether they can be considered exogenous to other plausible sources of the German business cycle. For the period 60.i to 89.iv no...

We implement capital in an endogenous separations New Keynesian matching model. In contrast to the vintage capital theory, we suggest a more general approach, such that workers have unrestricted access to a proportional share of the capital stock. We find that the introduction of capital...

Bivariate SVAR models employing long-run identifying restrictions are often used to investigate the source of business cycle fluctuations. Their advantage is the simplicity in use and interpretation. However, their low dimension may also lead to a failure of the identification procedure, with...