Trade and Business Cycle Co-Movements in Asia-Pacific

Recent empirical studies argue that the formation of a monetary union synchronizes the business cycles of member countries substantially by promoting their mutual trade. Other studies highlight the role of industry-specific shocks in national business cycles and suggest that the effect of trade intensity on international income co-movements is conditional on the industrial structures of individual countries.

Meta-analysis of the Business Cycle Correlation Between the Euro Area and the CEECs

We review the literature on business cycle correlation between the euro area and the Central and Eastern European countries (CEECs), a topic that has gained attention as the newest EU members approach monetary union. Our meta-analysis of 35 identified publications suggests that some CEECs already have comparably high correlation with the euro area business cycle. We find that estimation methodologies can have a significant effect on correlation coefficients.

Discussion: Fiscal Divergence and Business Cycle Synchronization: Irresponsability is Idiosyncratic by Darvas, A. K. Rose and G. Szapary

The idea of the paper is simple and appealing: the Maastricht Treaty, to the extent that it has enforced fiscal convergence, may have also induced business cycle synchronization. In other words, assuming that in the last fifteen years we have observed an increase in business cycle synchronization, this is likely to have been endogenous. The paper analyzes twenty one OECD countries on the basis of a simple panel regression where correlations between the GDP growth of countries’ pairs is regressed against indicators of fiscal divergence between the same pairs.

Business-cycle Fluctuations and International Equity Correlations

We study the link between international monthly equity correlations and the comovement of business-cycle fluctuations in seven major countries over the period 1970–2004. In order to measure international equity correlations, we estimated bivariate GARCH models featuring time-varying conditional correlations. To assess the robustness of our results, we analyzed different GARCH models and used different measures of business-cycle fluctuations.

A Useful Tool to Forecast the Euro-area Business Cycle Phases

Based on a novel extension of existing multivariate Markov-switching models, we provide the reader with a useful tool to analyze current business conditions and to make predictions about the future state of the Euro-area economy in real time. Apart from the Industrial Production Index, we find that the European Commission Industrial Confidence Indicator, that is issued with no delay, is very useful to construct the real-time predictions.

A New Framework to Analyze Business Cycle Synchronization

In this paper, we propose a new framework to analyze pairwise business cycle synchronization across a given set of countries. We show that our approach, that is based on multivariate Markov-switching procedures, leads to more reasonable results than other popular approaches developed in the literature. According to recent findings, we show that the G7 countries seem to exhibit two differentiated “Euro-zone” and “English-speaking” business cycles dynamics.

Abbonamento a RSS - 2006