Working Paper: CEPR ID: DP8347
Authors: Michael J. Artis; George Chouliarakis; PKG Harischandra
Abstract: This paper studies the international business cycle behaviour across 25 advanced and emerging market economies for which 125 years of annual GDP data are available. The picture that emerges is more fragmented than the one drawn by studies that focused on a narrower set of advanced market economies. The paper offers evidence in favour of a secular increase in international business cycle synchronization within a group of European and a group of English-speaking economies that started during 1950-1973 and accelerated since 1973. Yet, in other regions of the world, country-specific shocks are still the dominant forces of business cycle dynamics.
Keywords: business cycles; dynamic factor models; globalization; integration
JEL Codes: C32; E32; F41; N10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| globalization (F60) | business cycle synchronization (F44) |
| international shocks (F69) | business cycle synchronization (F44) |
| domestic policy autonomy (F52) | lack of synchronization (Y70) |
| country-specific shocks (F69) | business cycle synchronization (F44) |
| relative importance of domestic shocks (F41) | decline in synchronization (E32) |