The CEPR Business Cycle Dating Committee recently concluded that there is not yet enough evidence to call a business cycle trough in the Eurozone. Instead, the committee has announced a 'prolonged pause' in the recession. This Vox Talk discusses the possible directions that this situation could lead to and questions whether the Great Recession has harmed the Eurozone’s long-term growth prospects to the extent that meagre growth could become the 'new normal'.
Philippe Weil, 20 June 2014
CEPR CEPR Business Cycle Dating Committee, 17 June 2014
The simplest business cycle dating algorithm declares recessions over after two consecutive quarters of positive GDP growth. By that metric, the Eurozone recession has been over since 2013Q1. This column argues that growth and improvements in the labour market have been so anaemic that it is too early to call the end of the Eurozone recession. Indeed, if this is what an expansion looks like, then the state of the Eurozone economy might be even worse than economists feared.
Máximo Camacho, Gabriel Pérez-Quirós, Pilar Poncela, 03 April 2012
This column develops an early warning system to capture the trembling of the Eurozone economy before anyone else notices it, as seismologists do with earthquakes. It shows that the latest forecast suggests reductions in recession probabilities and that the crisis resolution mechanism could be behind this increase in confidence. Therefore, it seems that the Eurozone faced a short-lived double-dip recession.