International Business Cycle Synchronization in Historical Perspective
AbstractIn this paper, we review and attempt to explain the changes in business cycle synchronization among 16 industrial countries and the over the past century and a quarter, demarcated into four exchange rate regimes. We find that there is a secular trend towards increased synchronization for much of the twentieth century and that it occurs across diverse exchange rate regimes. This finding is in marked contrast to much of the recent literature, which has focused primarily on the evidence for the past 20 or 30 years and which has produced mixed results. We then examine the role of global shocks and shock transmission in the trend toward synchronization. Our key finding here is that global (common) shocks generally are the dominant influence.
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Date of creation: Jun 2010
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Other versions of this item:
- Michael D. Bordo & Thomas F. Helbling, 2011. "International Business Cycle Synchronization In Historical Perspective," Manchester School, University of Manchester, vol. 79(2), pages 208-238, 03.
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-26 (All new papers)
- NEP-BEC-2010-06-26 (Business Economics)
- NEP-CBA-2010-06-26 (Central Banking)
- NEP-HIS-2010-06-26 (Business, Economic & Financial History)
- NEP-OPM-2010-06-26 (Open Economy Macroeconomic)
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- Glenn Otto & Graham Voss & Luke Willard, 2001. "Understanding OECD Output Correlations," RBA Research Discussion Papers rdp2001-05, Reserve Bank of Australia.
- Michael D. Bordo & Barry Eichengreen & Jongwoo Kim, 1998. "Was There Really an Earlier Period of International Financial Integration Comparable to Today?," NBER Working Papers 6738, National Bureau of Economic Research, Inc.
- Tiago Trancoso, 2013. "Global macroeconomic interdependence: a minimum spanning tree approach," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 5(1), pages 179-189, June.
- Ewa Szymanik, 2012. "Business Cycles and Their International Transmission – the Introduction to the Problem," Equilibrium, Wydawnictwo Naukowe Uniwersytetu Mikolaja Kopernika, vol. 7, pages 55-72.
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