Ulrich Woitek

More international evidence on the historical properties of business cycles

This paper establishes stylized facts about business cycles in the late 19th century, using spectral analysis techniques which allow an intuitive description and analysis of cyclical structure in economic fluctuations. Analysis of industrial production data for 13 countries permits the following generalizations. In the advanced North Atlantic economies, a fairly regular long cycle with a periodicity of 7–10 years is identified in all countries. This component explains a substantial fraction of overall variation in industrial production. There is some evidence of a less regular, less powerful short cycle of 3–5 years duration. In peripheral economies experience is varied, but it is more often the short cycle that exercises greater influence. The long cycle component is shown to be highly correlated among the core economies, much less so between core and peripheral economies, and least of all among peripheral economies. The long cycle is more highly correlated among countries with important trading ties and those on a metallic monetary standard throughout the period.

Height Cycles in the 18th and 19th Centuries

Spectral analysis of the physical stature of Americans and Europeans in the 18th and 19th centuries reveals a cyclical structure similar to the traditional view of the business cycle: a longer cycle with a length of 7-10 years, and a shorter cycle with a length of 3-5 years. The correlation between height cycles and cycles of economic variables such as grain prices indicates an influence of economic cycles on physical stature. The phase shift between the cycles indicates that economic conditions are especially important for growth in infancy. In part, this result is due to a cumulative effect: born into a recessionary period, a child is likely to face several cyclical downturns during the growing years.

Searching for Political Business Cycles in Germany

One reslt of the revitalised literature on political business cycles is that there are signs in German data that elections and ideology have an impact. However, using monthly data for the period 1950-1989, and standard methods of time series analysis, we reject both the Nordhaus hypothesis of opportunistic cycles and the partisan approaches by Hibbs ans Alesina. We show that some results are sensitive to the assumption of stationarity. There are signs of policy cycles in M1. It is hard, though, to bring this in line with the Rogoff hypothesis of rational opportunistic cycles because of the German institutional setting.

Productivity Shocks and Aggregate Cycles in an Estimated Endogenous Growth Model

Using a two-sector endogenous growth model, this paper explores how productivity shocks in the goods and human capital producing sectors contribute to explaining aggregate cycles in output, consumption, investment and hours. To contextualize our findings, we also assess whether the human capital model or the standard real business cycle (RBC) model better explains the observed variation in these aggregates. We find that while neither of the workhorse growth models uniformly dominates the other across all variables and forecast horizons, the two-sector model provides a far better fit to the data. Some other key results are first, that Hicks-neutral shocks explain a greater share of output and consumption variation at shorter-forecast horizons whereas human capital productivity innovations dominate at longer ones. Second, the combined explanatory power of the two technology shocks in the human capital model is greater than the Hicks-neutral shock in the RBC model in the medium- and long-term for output and consumption. Finally, the RBC model outperforms the two-sector model with respect to explaining the observed variation in investment and hours.

How opportunistic are partisan German central bankers: Evidence on the Vaubel hypothesis

Abstract Recent research has found inconclusive evidence regarding the presence of opportunistic political business cycles in German data. Inferring from Vaubel, 1993 , Vaubel, 1997 one could argue, however, that at least in the case of monetary policy the results are seriously flawed from the onset, because an independent central bank such as the German Bundesbank will support the government only when it shares its partisan views. Vaubel has not presented parametric empirical evidence in support of his hypothesis. We show that the application of time series analysis yields results that clearly run counter to the hypothesis. Evidence on voting behaviour from the central bank council minutes points in the same direction. It appears perhaps paradoxically that an opportunistic government is better off facing an ideologically opposing Bundesbank council majority than a supportive one before elections.

Real Wages and Business Cycle Asymmetries

The cyclicality of real wages has important implications for the validity of competing business cycle theories. However, the empirical evidence on the aggregate level is inconclusive. Using a threshold vector autoregressive model for the US and Germany to condition the relationship between real wages and business fluctuations on the phase of the cycle, it is demonstrated that the inconclusive evidence is not only caused by measurement problems, estimation method and composition bias as discussed in the literature. In addition, one should also consider whether the economy is in an upswing or a downswing. In general, the evidence for countercyclical wages is stronger in Germany than for the US, but taken together there is no clear systematic pattern.

Economics and the Summer Olympics An Efficiency Analysis

Applying stochastic frontier analysis, we estimate distance to frontier of countries in the production of success at the Summer Olympic Games since the 1950s. Our measures of success are medal shares and a broader concept including Olympic diplomas. Following Bernard and Busse (2004), population and GDP are used as inputs. Although the impact of GDP is always positive, we show that the sign of the population effect depends on wealth and population size of a country. The results show that the spread of distance to frontier is very wide over time, across countries, gender, and sports: not only resource endowment matters but also utilization of resources. These differences can be seen as caused by differences in financial support, training methods, organization, or culture. Using a method proposed by Battese and Coelli (1995), the authors build on well-documented results in the literature and identify the channels through which planned economies and host countries generate Olympic success. The method allows shedding light on aspects of recent history, such as the consequences of the breakdown of the former Soviet Union.

BMI distribution/social stratification in Swiss conscripts from 1875 to present.

Background/Objectives:We aimed to extend the actual overweight discussion with new unbiased Swiss conscript data from 2005 to 2006, and to present for the first time Swiss data on body mass index (BMI) before 1950 and for the late-nineteenth century.Subjects/Methods:For this study, 19-year-old Swiss male conscripts (draft army; Cantons Bern, Zurich, Basel-Stadt and Basel-Land) from the census of 1875–1879, 1933–1939 and 2005–2006 (N=28 033; 2005–2006 census) were included. BMI distribution (World Health Organization (WHO) classification) and social stratification (International Labour Organization classification) were main outcome measures.Results:Mean BMI of 19-year-old men in Switzerland increased in the 50 years between the 1870s and the 1930s by 0.80 kg/m2 and between the 1930s and 2005 by 1.45 kg/m2. The modern BMI sample is much more right skewed and s.d. is higher. Obesity prevalence (according to modern WHO classification) has increased by a factor of 105 from 1870s until present. Over 23% of our representative sample of Swiss men in 2005–2006 had a BMI of over 25 kg/m2. In 2005–2006, contrary to the nineteenth century, unskilled workers had articulately higher BMI values at the 75th, 90th and 95th percentile than students; 12% of unskilled workers were obese against 2% of students.Conclusions:It thus seems that BMI relations between the upper and the lower end of the socio-economic strata changed inversely from the late-nineteenth century to 2005–2006. We further propose that the phenomenon of massive right-skewing BMI distribution between the 1930s and 2005–2006 affected the lower socio-economic strata to a far greater extent than the higher socio-economic group.

Regional business cycles in Italy

There is clear evidence for differences in the structure of the Italian regional business cycle in the period 1951-2004: the relationship with the national business cycle is closer in the North than in the South. The interaction between regional cycles shows considerable variation over time. There is a change in the timing of the turning points and the strength of the relationship. In the 1950s and the early 1960s, the cycle in the North leads the cycle in the South. Comovement is strongest in the period 1965-1975. After 1975, the cycles start to drift out of phase, again with the North leading the South.

Variability of height, weight, and body mass index in a Swiss armed forces 2005 census

The influence of the environment and genetics on individual biological characteristics, such as body mass and stature is well known. Many studies of these relationships have been based on conscript data. These studies often suffer from the fact that their data cover only a part of the population. Characterized by prosperity, democratic stability and enormous micro-regional cultural diversity, Switzerland is in the unique situation of offering data covering more than 80% of annual male birth cohorts. The aim of this study is to assess the impact of socioeconomic success, cultural differences, month of birth, and altitude (among other factors) on individual anthropometric characteristics of conscripts (N approximately 28,000) in the 2005 census. Our result highlights in such a large male sample the relationship between economic environment, regional cultural diversity, climate, and other factors, such as individual month of birth on stature and weight. Socioeconomic status, culture (as reflected by mother tongue), and month of birth were found to have significant effects on height and weight, while altitude did not show such effects. In general, weight is more affected by all these variables than height. Taking weight-dependent mortality and morbidity into account, it is of foremost public interest to know more about paired effects of living conditions on stature and weight in a highly developed society.