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The article discusses the discrete Euler processes and their implications in forecasting cycles in non-stationary data where periodic behavior changes approximately linearly in time. The sample M-spectrum and the spectra estimator of an Euler model are used to detect cycles of an Euler process.

According to the financial accelerator model, a small monetary or other shock is amplified through credit market restrictions on small firms, and swings in balance sheets over the business cycle cause swings in small firms' spending. This paper incorporates these notions in an empirical model of firm behavior. We use unit transaction cost of debt and rationed credit as indicators of balance sheets and credit market conditions. Since a firm's credit may or may not be rationed, the empirical model is formulated as a multi-equation switching regression model. This model is estimated for two different groups of small firms in the machinery and equipment industry as reported in the Compustat database. JEL classification: E51; E62 Keywords: Unit transaction cost of debt; Borrowing limit; Switching regression

Macroeconomic conditions such as public policies and institutional development affect benefits distribution. This effect is felt in variations of the economic growth rate, class mobility and inequality in wealth. The inequality level can not singularly solved by an improved class mobility. Changes must be integrated with public policies and other macroeconomic factors to improve overall economic conditions.

In light of several economic and financial crises and institutional changes experienced by the European countries, we examine whether these economies achieved synchronization of their business cycles and fostered synchronization of their growth rates. Controlling for reverse causality, we conduct multiple endogenous break tests and find that (i) several endogenous break dates correspond to idiosyncratic shocks affecting individual countries or major shocks in international arena but not the adoption of the euro; this result suggests that the convergence process has been nonlinear for a number of countries and that studies imposing break dates exogenously, such as the launch of euro, may lead to biased conclusions; (ii) while output growth was increasingly synchronized for some countries, integration occurred in an asymmetric way and it did not change or did not occur for others despite being in the same common currency area (iii) convergence has been prevalent among the non-Eurozone economies in our sample. [ABSTRACT FROM AUTHOR]

This article studies the impact of monetary policy shocks on equity returns and their volatility among nine industries and their affiliated firms in the United States. We use an extension of the traditional CAPM as the analytical framework and approximate policy shocks with the unexpected component of the federal funds rate. Data on the characteristics of firms and industries are obtained from Compustat and the Center for Research in Security Prices, covering a sample period from 1987 to 2009. Our results clearly show that responses to policy shocks vary by industry and across firms. Furthermore, credit availability matters in certain industries, and small, financially constrained, and bank-dependent firms are found to be more vulnerable to unexpected federal funds rate shocks. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to evaluate the variations in SOE efficiency and productivity from the perspectives of macroeconomic fluctuations and systematic reform in China during 1986–2003. We use Data Envelopment Analysis to measure SOE efficiency. Subsequently, we use the Malmquist Index of Productivity change to measure productivity growth. The empirical results show that SOE efficiency and productivity exhibited obvious improvements during periods of strong systematic reform and a prosperous economy. The systematic reform after 1998 had a clear-cut impact on SOE performance. [ABSTRACT FROM AUTHOR]