Working Papers present research work by both Danmarks Nationalbank’s employees and our partners. Working Papers are primarily targeted at professionals and people with an interest in central banking research as well as economics and finance in a broader sense.

Economic activity

Samvariation i danske konjunkturcykler

Danish business cycles from 1974 to 2000 are studied. The HP-filter and the Baxter-king filter are applied and several empirical regularities are identified: Consumption tends to lead the business cycle while investment, especially construction, follows with a lag. Export does not covariate systematically with activity, but high activity is followed by a low market share, indicating a domestic capacity effect. Prices are in general found to be counter cyclical, reflecting i.a. a long lag in the price impact of demand shocks. Demand shocks seem to impact prices mainly via the labour market rather than pulling prices directly. It is also established that real interest rates based on realised inflation have little co-variation with activity and it is suggested to use a real interest rate based on filtered inflation instead. Rolling 10-year sample periods are used to check all results for robustness over time.