Title: Stylised facts of Greek business cycles: new evidence from aggregate and across regimes data

Authors: Nicholas Apergis, Alexandros Panethimitakis

Addresses: Department of Financial and Banking Management, University of Piraeus, Piraeus 18534, Greece. ' Department of Economics, University of Athens, Athens 10559, Greece

Abstract: This study addresses stylised facts of the Greek economy over the period 1960–2005. The findings convey the procyclicality of consumption. Consumption is shown to be less volatile but investment and government expenses are shown to be more volatile than income. Prices are countercyclical, lending support to real business cycles (RBC). Real wages are procyclical, indicating that labour market developments are explained by shocks that shift the labour demand curve. By making allowances for changes in the regime, the empirical analysis provides robust support to the same conclusions. The study also provides evidence about the identification of shocks related to the business cycle. The results show that it is real shocks that drive the economy, implying that demand management policies do not work.

Keywords: real business cycles; stylised facts; real wages; variance decompositions; Greek economy; Greece; cross-regime data; aggregate data; procyclicality; consumption; volatility; investment; government expenditure; incomes; countercyclical prices; procyclical wages; labour markets; demand curves; regime changes; economic shocks; demand management; government policies; economics; business research.

DOI: 10.1504/IJEBR.2011.038792

International Journal of Economics and Business Research, 2011 Vol.3 No.2, pp.147 - 165

Published online: 18 Apr 2015 *

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