ClubMed? Cyclical Fluctuations in the Mediterranean Basin

• Authors: Matteo Ciccarelli and Fabio Canova.
• BSE Working Paper: 532 | September 15
• Keywords: Business cycles , Bayesian methods , Mediterranean basin , Developing and developed countries
• JEL codes: C11, C33, E32
• Business cycles
• Bayesian methods
• Mediterranean basin
• Developing and developed countries

We investigate the similarities of macroeconomicfluctuations in the Mediterranean basin and their convergence. A model with three geo-political indicators, covering the West, the East and the MENA portions of the Mediterranean, characterizes well the historical experience since the early 1980. Convergence and divergence coexist in the region and are reversible. Except forn the West, domestic cyclical fluctuations are still due to national and idiosyncratic causes. The outlook for the next few years looks rosier for the MENA and the East blocks than for the West.