2007

Trade and Business Cycle Synchronization in OECD Countries. A Re-Examination

This paper re-examines the relationship between trade intensity and business cycle synchronization for 21 OECD countries in the period 1970–2003. Instead of using instrumental variables, we estimate a multivariate model including variables capturing specialization and similarity of economic policies. We confirm that trade intensity affects synchronization, but the effect is much smaller than previously reported. Other factors, like specialization and convergence in monetary and fiscal policies, have a similar impact on business cycle synchronization as trade intensity.

Regional Business Cycle Synchronization Through Expectations

This paper provides an example in which regional business cycles may synchronize via producers’ expectations, even though there is no interregional trade, by means of a system of globally coupled, noninvertible maps. We concentrate on the dependence of the dynamics on a parameter Z which denotes the inverse of price elasticity of demand. Simulation results show that several phases (the short transient, the complete asynchronous, the long transient and the intermediate

Regional Business Cycle Synchronization in Europe?

We analyse regional business cycle synchronization in the Euro Area, using Gross Value Added in 53 NUTS 1 regions for a period of thirty years (1975-2005), detrended by Hodrick-Prescott and the Christiano-Fitzgerald filters. We conclude that, on average, synchronization has increased for the period considered with exceptions during the eighties and the beginning of the nineties. Still, the correlation of the business cycle in some regions with the benchmark remained low or even decreased. Our findings also support the hypothesis of the existence of a ‘national border’ effect.

Jump-and-Rest Effect of U.S. Business Cycles

One of the most familiar empirical stylized facts about output dynamics in the United States is the positive autocorrelation of output growth. This paper shows that positive autocorrelation can be better captured by shifts between business cycle states rather than by the standard view of autoregressive coefficients. The result is extremely robust to different nonlinear alternative models and applies not only to output but also to the most relevant macroeconomic variables.

Aggregate Shocks or Aggregate Information? Costly Information and Business Cycle Comovement

Synchronized expansions and contractions across sectors define business cycles. Yet synchronization is puzzling because productivity across sectors exhibits weak correlation. While previous explanations emphasized production complementarity, our analysis explores complementarity in information acquisition. Because information about future productivity has a high fixed cost of production and a low marginal cost of replication, sectors can share the cost of acquiring aggregate information, rather than each paying the full production cost to forecast their sector-specific productivity.

Business Cycle Synchronization of the Euro Area with the New and Negotiating Member Countries

We examine business cycle synchronizations between the euro area and the recently acceded EU and currently negotiating countries. Strong evidence is uncovered of time-variation in the degree of co-movement between the cyclical components of monthly industrial production indicators for each of these countries with a euro area aggregate, which is then modeled through a bivariate VAR-GARCH specification with a smoothly time-varying correlation that allows for structural change.

Business Cycle Synchronization and Insurance Mechanisms in the EU

In this paper we provide a positive exercise on past business-cycle correlations and risk sharing in the European Union, and on the ability of insurance mechanisms and fiscal policies to smooth income fluctuations. The results suggest in particular that while some of the new Member States have well synchronized business cycles, for some of the other countries, business cycles are not yet well synchronized with the euro area’s business cycle, and risk-sharing mechanisms may not provide enough insurance against shocks.

An Indicator of the Regional Cycle in Italy

Recently regional economics and the analysis of business cycle at a more disaggregated than the national level, have attracted increasingly more attention. The aim of this paper is the construction of a high frequency and updated indicator of economic activity in each of the 20 Italian regions, just like the ones that are calculated by the Federal Reserve Bank of Philadelphia (Crone et al. 2004). The proposed indicators for Italian regions are based on a wide set of variables, none of which could be considered as a reference series in describing business cycle or its turning points.

Abbonamento a RSS - 2007