Business Cycles’ Characteristics of the Mediterranean Area Countries

In this paper we investigate the characteristics of business cycles fluctuations in the countries of the Mediterranean region by applying the Christiano-Fitzgerald bandpass filter to the output series of 12 Mediterranean countries over the period 1950-1998. The main properties of business cycle fluctuations (persistence, volatility, asymmetry and synchronization) are computed with reference to the deviation or growth cycle definition of the business cycle. Overall, the results of our analysis suggest, as expected, the existence of important differences in the characteristics of business cycle fluctuations among countries belonging to different economic level of development. Moreover, the average reduction of the degree of synchronization among Mediterranean countries seems to suggest a weakening of the economic links among Mediterranean countries, and thus a reduction of the economic importance of the links in this area in comparison to the European continental area. Topics in Middle Eastern and African Economies Vol. 6, September 2004