This paper is an empirical exercise that seeks to reveal the nature of economic fluctuations in the archetypal small open economy of Singapore. We assess the extent to which local business cycles are influenced by their foreign counterparts with regards to cyclicality, co-movement and volatility characteristics and then document how shock waves from abroad are spread to the broader macroeconomy once they reach Singapore’s shores. To do this, we make use of linear filters and stochastic trend models to extract the cyclical component of economic activity. The results indicate that, while idiosyncrasies are present in Singapore’s macroeconomic fluctuations, there are also stylized facts to be distilled for small open economies.
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Paper provided by Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre in its series Economic Growth centre Working Paper Series with number
0611.
Find related papers by JEL classification: C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies