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International Business Cycles: World, Region, and Country-Specific Factors

  • M. Ayhan Kose
  • Christopher Otrok
  • Charles H. Whiteman

The paper investigates the common dynamic properties of business-cycle fluctuations across countries, regions, and the world. We employ a Bayesian dynamic latent factor model to estimate common components in macroeconomic aggregates (output, consumption, and investment) in a 60-country sample covering seven regions of the world. The results indicate that a common world factor is an important source of volatility for aggregates in most countries, providing evidence for a world business cycle. We find that region-specific factors play only a minor role in explaining fluctuations in economic activity. We also document similarities and differences across regions, countries, and aggregates. (JEL F41, E32, C11, C32)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/000282803769206278
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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 93 (2003)
Issue (Month): 4 (September)
Pages: 1216-1239

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Handle: RePEc:aea:aecrev:v:93:y:2003:i:4:p:1216-1239
Note: DOI: 10.1257/000282803769206278
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