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Business Cycles in Some Selected Oil Producing Countries: Iran versus Three OECD Members

Author

Listed:
  • Taheri, Abouzar

    (Department of Economics, Central Tehran Branch, Islamic Azad University, Iran)

  • Nessabian, Shahriyar

    (Department of Economics, Central Tehran Branch, Islamic Azad University, Iran)

  • Moghaddasi, Reza

    (Department of Agricultural Economics, Science and Research Branch, Islamic Azad University, Iran)

  • Arbabi, Farzin

    (Department of Economics, Central Tehran Branch, Islamic Azad University, Iran)

  • Damankeshideh, Marjan

    (Department of Economics, Central Tehran Branch, Islamic Azad University, Iran)

Abstract

This paper analyses the fluctuations of the business cycle in selected oil-producing countries of the Organization for Economic Co-operation and Development (OECD) and Iran during the period 1970:Q1–2015:Q4. We start by using a two-stage Hodrick–Prescott filtering process to extract a cyclical component of GDP, then the modified BBQ algorithm is used to identify the chronologies and some measures of business cycle characteristics, and finally the main features of business cycle fluctuations (persistence, volatility, asymmetry, and synchronization) are estimated. The results indicate the difference in the characteristics of business cycle fluctuations in countries with different levels of economic development. Both amplitude and severity of Iran as a developing country were high, and average duration of contraction was longer than expansion. As a result, asymmetries in both steepness and deepness are observed in Iran. Meanwhile, output persistence and volatility in Iran were above and below that of three OECD members’ average, respectively. The last part is based on the three indices for evaluating synchronization. Other findings reveal a high degree of synchronization between countries except Iran.

Suggested Citation

  • Taheri, Abouzar & Nessabian, Shahriyar & Moghaddasi, Reza & Arbabi, Farzin & Damankeshideh, Marjan, 2020. "Business Cycles in Some Selected Oil Producing Countries: Iran versus Three OECD Members," Asian Journal of Applied Economics/ Applied Economics Journal, Kasetsart University, Faculty of Economics, Center for Applied Economic Research, vol. 27(1), pages 52-74, June.
    • Handle: RePEc:ris:apecjn:0038
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    More about this item

    Keywords

    growth cycle; OECD and Iran; Hodrick–Prescott filter; turning point analysis;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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