Economic Cycles and Their Synchronization: A Comparison of Cyclic Modes in Three European Countries

The present work applies singular spectrum analysis (SSA) to the study of\udmacroeconomic \uductuations in three European countries: Italy, The Netherlands,\udand the United Kingdom. This advanced spectral method provides valuable\udspatial and frequency information for multivariate data sets and goes far\udbeyond the classical forms of time domain analysis. In particular, SSA enables\udus to identify dominant cycles that characterize the deterministic behavior of\udeach time series separately, as well as their shared behavior. We demonstrate its\udusefulness by analyzing several fundamental indicators of the three countries'\udreal aggregate economy in a univariate, as well as a multivariate setting. Since\udbusiness cycles are international phenomena, which show common characteristics\udacross countries, our aim is to uncover supranational behavior within the\udset of representative European economies selected herein. Finally, the analysis\udis extended to include several indicators from the U.S. economy, in order to\udexamine its in\uduence on the European economies under study and their interrelationships