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Measuring the Sources of Cyclical Fluctuations in the G7 Economies

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  • Centoni, Marco

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  • Cubadda, Gianluca
  • Hecq, Alain

Abstract

We analyze herein the importance of four types of shocks in contributing to the business cycles of the G7 economies. After disentangling the common permanent and transitory shocks in the G7 outputs, we identify the domestic and foreign components of such shocks for each country. This provides us with quite a flexible palette for understanding the degree of openness of the G7 countries, useful information for the analysis of the strengths and weaknesses of each national economy. Our empirical analysis reveals that the cycles of most of the G7 outputs are dominated by their domestic components and that the foreign components are almost entirely due to permanent shocks.

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Bibliographic Info

Paper provided by University of Molise, Dept. EGSeI in its series Economics & Statistics Discussion Papers with number esdp06028.

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Length: 10 pages
Date of creation: 28 Apr 2006
Date of revision:
Handle: RePEc:mol:ecsdps:esdp06028

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Keywords: International business cycles; Permanent-Transitory decompositions; serial correlation common features; Frequency domain analysis.;

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  1. Kwark, Noh-Sun, 1999. "Sources of international business fluctuations: Country-specific shocks or worldwide shocks?," Journal of International Economics, Elsevier, Elsevier, vol. 48(2), pages 367-385, August.
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  15. Marco Centoni & Gianluca Cubadda & Alain Hecq, 2008. "Common Shocks, Common Dynamics, and the International Business Cycle," CEIS Research Paper, Tor Vergata University, CEIS 106, Tor Vergata University, CEIS, revised 07 Jul 2008.
  16. Ahmed, Shaghil & Ickes, Barry W. & Ping Wang & Byung Sam Yoo, 1993. "International Business Cycles," American Economic Review, American Economic Association, American Economic Association, vol. 83(3), pages 335-59, June.
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Cited by:
  1. Herrerias, M.J. & Ordóñez, J., 2014. "If the United States sneezes, does the world need “pain-killers”?," International Review of Economics & Finance, Elsevier, Elsevier, vol. 31(C), pages 159-170.
  2. Martin Schneider & Gerhard Fenz, 2011. "Transmission of business cycle shocks between the US and the euro area," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 43(21), pages 2777-2793.

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