The Cross-Country Effects of EU Holidays on Domestic GDP's

Abstract

The number and the distribution of non-working days during the year has recently entered the policy debate related to the slow pace of the European economy.The fact that the number of non-working days can affect the quarter to quarter performance of GDP is well known and hardly disputable. It has recently been argued that not only domestic holidays can in principle be important in each single economy, but also foreign ones, as far as there exist strict connections among the national economies. Given the existing evidence at the national level relative to the influence of calendar effects on GDP, the first step of the econometric analysis in the present research is a check on the existence (and significance) of international spillover effects. Our investigation uses both structural time series models and the ARIMA model-based approach. These two different approaches are used jointly and their specific features are exploited to represent and estimate the time series components of our interest. The empirical evidence does not support the spillover hypothesis.