Working Paper: CEPR ID: DP7968
Authors: Sumru G. Altug; Melike Bildirici
Abstract: This paper characterizes business cycle phenomena in a sample of 27 developed and developing economies using a univariate Markov regime switching approach. It examines the efficacy of this approach for detecting business cycle turning points and for identifyingdistinct economic regimes for each country in question. The paper also provides a comparison of the business cycle turning points implied by this study and those derived in other studies. Our findings document the importance of heterogeneity of individual countries?experiences. We also argue that consideration of a large and diverse group of countries provides an alternative perspective on the co-movement of aggregate economic activity worldwide
Keywords: business cycles; Markov switching approach; nonparametric modeling; turning point analysis
JEL Codes: C32; E32; E37
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Markov switching model (C32) | cyclical characteristics of GDP growth (E32) |
| global shocks (F69) | business cycle behavior in emerging economies (E32) |
| financial crisis of 2007-2008 (G01) | declines in output during recessions in emerging markets (F44) |
| institutional, historical, and political factors (B15) | business cycles in emerging economies (F44) |
| synchronization of business cycles (F44) | commonality in timing and dynamics of economic downturns across countries (F44) |