This paper compares the depth of the recent crisis and the Great Depression. We use a new data set to compare the drop in activity in the industrialized countries for seven activity indicators. This is done under the assumption that the recent crisis leveled off in mid-2009 for production and will do so for unemployment in 2010. Our data indicate that the recent crisis indeed had the potential to be another Great Depression, as shown by the speed and simultaneity of the decline in the first nine months. However, if we assume that a large second dip can be avoided, the drop in all indicators will have been smaller than during the Great Depression. This holds true specifically for GDP, employment and prices, and least for manufacturing output. The difference in the depth in the crises concurs with differences in policy reaction. This time monetary policy and fiscal policy were applied courageously, speedily and partly internationally coordinated. During the Great Depression for several years fiscal policy tried to stabilize budgets instead of aggregate demand, and either monetary policy was not applied or was rather ineffective insofar as deflation turned lower nominal interest rates into higher real rates. Only future research will be able to prove the exact impact of economic policy, but the current tentative conclusion is that economic policy prevented the recent crisis from developing into a second Great Depression. This is also a partial vindication for economists. The majority of them might not have been able to predict the crisis, but the science did learn its lesson from the Great Depression and was able to give decent policy advice to at least limit the depth of the recent crisis. (author's abstract)

We analyze sector specific shocks in productivity and demand in 19 manufacturing sectors of the Austrian economy. Based on a structural vector autoregressive (SVAR) model with long run restrictions developed by Gali (1999) we extract technology and non-technology shocks from sectoral and aggregate data and study their patterns and relationship by means of a principal components analysis. We find a close association of sectoral and macroeconomic non-technology shocks but only a very weak association for technology shocks. Impulse-response analysis indicates that for almost all manufacturing sectors and the Austrian economy productivity growth rates experience an immediate increase to positive technology shocks while the hours worked decline. We therefore confirm Gali's results on the level of manufacturing industries. Finally, we use the identified shocks as explanatory variables in fixed effect regressions on growth rates of employment, output and investment. We find that our shocks are closely associated to employment growth and output growth but not to growth in investment. The effect of technology shocks is different on the level of manufacturing industries and the aggregate economy. (author's abstract) / Series: Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness"

A gasoline direct injection engine was set-up to operate with a dynamometer in a test cell. Test cycle and emissions measurement procedures were developed for evaluating the regulated and non-regulated gaseous emissions. Equipment and techniques for particulate matter measurements were adapted for use with the gasoline direct injection engine. The particulate matter emissions produced by the engine were compared between two different fuels; gasoline and E10 (10% ethanol and 90% gasoline). The gaseous emissions generated by the engine when it was run on gasoline and E30 (30% ethanol and 70% gasoline) were also compared. Particle number decreased with E10 for hot start conditions, while the opposite was observed for cold start conditions. Particulate matter emissions were found to track with acetylene and ethylene emissions.

A gasoline direct injection engine was set-up to operate with a dynamometer in a test cell. Test cycle and emissions measurement procedures were developed for evaluating the regulated and non-regulated gaseous emissions. Equipment and techniques for particulate matter measurements were adapted for use with the gasoline direct injection engine. The particulate matter emissions produced by the engine were compared between two different fuels; gasoline and E10 (10% ethanol and 90% gasoline). The gaseous emissions generated by the engine when it was run on gasoline and E30 (30% ethanol and 70% gasoline) were also compared. Particle number decreased with E10 for hot start conditions, while the opposite was observed for cold start conditions. Particulate matter emissions were found to track with acetylene and ethylene emissions.

Previous studies have discounted important factors and indirect channels that might contribute to business cycle synchronization (BSC) in the EU. We estimate the effects of market integration and economic policy coordination on bilateral business cycle correlations over the period 1995-2012 using a simultaneous equations model that takes into accounts both the endogenous relationships and unveils direct and indirect effects. The results suggest that (i) trade and FDI have a pronounced positive effect on BCS, particularly between incumbent and new EU members. (ii) Rising specialization does not decouple business cycles. (iii) The decline of income disparities in EU27 contributes to BCS, as converging countries develop stronger trade and FDI linkages. (iv) There is strong evidence that poor fiscal discipline of EU members is a major impediment of business cycle synchronization. (v) The same argument holds true for exchange rate fluctuations that hinder BCS, particularly in EU15. Since BCS is a fundamental prerequisite and objective in an effective monetary union, the EU has to promote market integration and strengthen the common setting of economic policies.