Page - 12 - in The Austrian Business Cycle in the European Context

12 is based on the Chow-Un approach21, where the earlier quarters were taken as an indicator for distributing annual totals. With this method, sectoral quarterly time series summing up to annual totals have been produced. The restriction to only sectoral national accounts data does not provide insight into the sources of the business cycle phenome- non, which lies outside this study. Instead, the focus is on transmis- sion mechanisms between sectors i.e. their lead and lag structure, their cyclical variation and their dependence on euro area and German aggregates. Shocks which can potentially explain busi- ness cycle variations (like changes in oil prices or exchange rates) are not considered as they are assumed to hit all observed regions or their effect will be transmitted by the cyclical variation from one region to the other over time22. 21 See Chow-Un (1971). 22 Artis - Zhang ( 1999) found empirical evidence that there is a connection be- tween exchange rates and the transmission of business cycles across national fron- tiers.