Page - 11 - in The Austrian Business Cycle in the European Context

l l cyclical variations for West Germany before 1991 exhibit the same turning points as for the new re-united German economy. Whereas this assumption seems warranted for the turning points, it is probably less so for the amplitudes of these variations. Since planned economies, like the former East Germany, are expected to show smaller cyclical variations, the coefficient of variation for the sum of both areas should be lower than the one produced by chaining. This has to be borne in mind for an appropriate interpre- tation of business cycle variations. Nevertheless, data have been chained backward as has been done by Fagan - Henry - Mestre (200 l) for the whole euro area, after a seasonal adjustment pro- cedure. Due to the German reunification, data for the whole euro area also dated back only until 199 l. Unlike for Germany, no data - nei- ther annual nor quarterly - were available on a sectoral basis for the euro area. Only a seasonally-adjusted series for total GDP, made available by the Euro Area Business Cycle Network (EABCN)20 and reaching from to beginning of 1970 till the fourth quarter of 2003, entered the data set. Using the latest euro area GDP data, this series has been extended until the second quarter of 2005. For Austria three data sets have been used to construct quarterly sectoral time series reaching back to the beginning of 197 6. The first are annual national accounts data starting 197 6, the second quarterly national accounts series reaching back to the first quar- ter of 1988 which are consistent with the respective annual figures. For chaining back quarterly figures before 1988, national accounts data of an earlier vintage - showing a similar sectoral definition - have been used as a third data set. In order to retain business cy- cle variations of the annual time series, the process of chaining quarters took account of these annual totals. The method applied 20 See www.eabcn.org. The method of construction of this series was published by Fagan -Henry -Mestre (2001).