Do labor market institutions matter for business cycles?∗ - European ...

8 TABLES AND FIGURES 29
Table 1: Correlation between the macroeconomic factor and variables
Variables
MPC1
CA/GDP 0.89
(X+M)/GDP 0.58
G/GDP 0.05
IT 0.27
GDP/pop 0.66
EMU 0.18
u 0.68
π 0.82
w h ere M P C 1 denotes the p rincip al com p onent exctracted from th e follow ing m acro econ om ic series: C A /G D P: current account to G D P ratio;
(X + M )/G D P: exp orts+ im p orts to G D P ratio; G /G D P :govern m ent sp en d in g to G D P ratio, IT : du m m y for in fl ation targetin g, G D P /p op : G D P
p er cap ita; E M U : d um m y for b elongin g to th e E M U ; u : average un em p loym ent rate; π: average in fl ation rate.