Does Asymmetry of International Shocks Matter for the U.S. Business Cycle?
AbstractThis article proposes and investigates the asymmetry hypothesis, which predicts that an international asymmetric shock tends to have a stronger and longer effect on the U.S. business cycle than a symmetric shock. The hypothesis finds empirical support in the impulse responses of U.S. output and inflation to symmetric and asymmetric shocks; those responses are estimated in a four-variable structural vector autoregression. The hypothesis also finds support in stylized facts: The longest U.S. expansions have tended to occur when the rest of the world was growing below potential. (JEL E3, E5, E4) Copyright 2004, Oxford University Press.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 42 (2004)
Issue (Month): 4 (October)
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- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
- E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
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