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Business Cycles In Small Open Economies: Evidence From Panel Data Between 1900 And 2013

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  • Wataru Miyamoto
  • Thuy Lan Nguyen

Abstract

Using a novel data set for 17 countries between 1900 and 2013, we characterize business cycles in both small developed and developing countries in a model with financial frictions and a common shock structure. We estimate the model jointly for these 17 countries using Bayesian methods. We find that financial frictions are an important feature for not only developing but also small developed countries. Furthermore, business cycles in both groups of countries are marked with trend productivity shocks. Common disturbances explain one third of the fluctuations in small open economies, especially during important worldwide phenomena.

Suggested Citation

  • Wataru Miyamoto & Thuy Lan Nguyen, 2017. "Business Cycles In Small Open Economies: Evidence From Panel Data Between 1900 And 2013," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(3), pages 1007-1044, August.
    • Handle: RePEc:wly:iecrev:v:58:y:2017:i:3:p:1007-1044
    DOI: 10.1111/iere.12243
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    Cited by:

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    6. Yuki Murakami, 2025. "Time-Varying Volatility in Emerging Market Business Cycles," Working Papers 2514, Waseda University, Faculty of Political Science and Economics.
    7. Gianluca Benigno & Andrew Foerster & Christopher Otrok & Alessandro Rebucci, 2025. "Estimating macroeconomic models of financial crises: An endogenous regime‐switching approach," Quantitative Economics, Econometric Society, vol. 16(1), pages 1-47, January.
    8. Dan Cao & Jean-Paul L’Huillier & Donghoon Yoo, 2022. "When Is the Trend the Cycle?," ISER Discussion Paper 1177, Institute of Social and Economic Research, The University of Osaka.
    9. Na, Seunghoon & Yoo, Donghoon, 2025. "Overreaction and macroeconomic fluctuation of the external balance," Journal of Monetary Economics, Elsevier, vol. 151(C).
    10. Hwang, Seolwoong & Kim, Soyoung, 2022. "Real business cycles in emerging countries: Are Asian business cycles different from Latin American business cycles?," Journal of International Money and Finance, Elsevier, vol. 129(C).
    11. Singh, Anurag, 2024. "Clustered sovereign defaults," Journal of International Economics, Elsevier, vol. 152(C).

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