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Global Business Cycles: Degree of Synchronization in the Current Downturn Is Unprecedented

Author

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  • Vladimir Kuzin
  • Martin Hillebrand

Abstract

Empirical data analysis shows that the business cycles of industrialized nations demonstrate a fairly strong degree of synchronization in periods of growth, and a lesser degree of synchronization during periods of contraction. The current recession, however, breaks this pattern: the business cycles of industrialized nations have exhibited an unprecedented degree of synchronization since the start of the crisis. In the worst economic downturn since the end of the Second World War, the most important national economies have been drawn one after another into the maelstrom of global recession. In this paper we present a method for measuring business-cycle synchronization between individual countries. In our comparison of the current crisis with previous recessions, a focus is placed on the G7 nations and Germany's most important trading partners.

Suggested Citation

  • Vladimir Kuzin & Martin Hillebrand, 2009. "Global Business Cycles: Degree of Synchronization in the Current Downturn Is Unprecedented," Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 5(27), pages 188-192.
  • Handle: RePEc:diw:diwwrp:wr5-27
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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.341196.de/diw_wr_2009-27.pdf
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    Cited by:

    1. 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.

    More about this item

    Keywords

    Business cycle synchronisation; Markov switching models;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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