If the Unites States sneezes, does the world need paracetamol?
There is an old saying that states that “If the United States sneezes, the rest of the world catches a cold”. Against this background, it is argued that some countries, especifically China, can “decouple” from the US economy and sustain strong growth in the face of a US slowdown. In this paper we analyze the extent to which the US economy affects international business fluctuations across countries. A multivariate nonlinear LSTAR model is estimated for the GDP cyclical component of China, France, Germany, the UK and the USA. This nonlinear framework allows the business cycles asymmetries to be captured properly in order to identify the synchronization behavior across countries. Our results suggest that there is a relevant influence from the US cycle, since it acts as a source of international business cycle synchronization. However, spillovers from US cycle fluctuations to China are rather modest.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (34) 964728590-92
Fax: (34) 964728591
Web page: http://www.doctreballeco.uji.es/Email:
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael D. Bordo & Thomas Helbling, 2003. "Have National Business Cycles Become More Synchronized?," NBER Working Papers 10130, National Bureau of Economic Research, Inc.
- Robert Inklaar & Richard Jong-A-Pin & Jakob de Haan, 2005.
"Trade and Business Cycle Synchronization in OECD Countries - a Re-examination,"
CESifo Working Paper Series
1546, CESifo Group Munich.
- Inklaar, Robert & Jong-A-Pin, Richard & de Haan, Jakob, 2008. "Trade and business cycle synchronization in OECD countries--A re-examination," European Economic Review, Elsevier, vol. 52(4), pages 646-666, May.
- Kose, M. Ayhan & Otrok, Christopher M. & Prasad, Eswar S., 2008.
"Global business cycles: convergence or decoupling?,"
Discussion Paper Series 1: Economic Studies
2008,17, Deutsche Bundesbank, Research Centre.
- M. Ayhan Kose & Christopher Otrok & Eswar Prasad, 2012. "Global Business Cycles: Convergence Or Decoupling?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(2), pages 511-538, 05.
- M. Ayhan Kose & Eswar Prasad & Christopher Otrok, 2008. "Global Business Cycles; Convergence or Decoupling?," IMF Working Papers 08/143, International Monetary Fund.
- Kose, M. Ayhan & Otrok, Christopher & Prasad, Eswar, 2008. "Global Business Cycles: Convergence or Decoupling?," IZA Discussion Papers 3442, Institute for the Study of Labor (IZA).
- M. Ayhan Kose & Christopher Otrok & Eswar S. Prasad, 2008. "Global Business Cycles: Convergence or Decoupling?," NBER Working Papers 14292, National Bureau of Economic Research, Inc.
- Dick van Dijk & Timo Terasvirta & Philip Hans Franses, 2002.
"Smooth Transition Autoregressive Models — A Survey Of Recent Developments,"
Taylor & Francis Journals, vol. 21(1), pages 1-47.
- van Dijk, D.J.C. & Terasvirta, T. & Franses, Ph.H.B.F., 2000. "Smooth transition autoregressive models - A survey of recent developments," Econometric Institute Research Papers EI 2000-23/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- van Dijk, Dick & Teräsvirta, Timo & Franses, Philip Hans, 2000. "Smooth Transition Autoregressive Models - A Survey of Recent Developments," SSE/EFI Working Paper Series in Economics and Finance 380, Stockholm School of Economics, revised 17 Jan 2001.
- Sollis, Robert, 2009. "A simple unit root test against asymmetric STAR nonlinearity with an application to real exchange rates in Nordic countries," Economic Modelling, Elsevier, vol. 26(1), pages 118-125, January.
- Jarko Fidrmuc & Iikka Korhonen & Ivana Bátorová, 2013.
"China in the World Economy: Dynamic Correlation Analysis of Business Cycles,"
CESifo Economic Studies,
CESifo, vol. 59(2), pages 392-411, June.
- Fidrmuc, Jarko & Korhonen, Iikka & Bátorová, Ivana, 2008. "China in the world economy: Dynamic correlation analysis of business cycles," BOFIT Discussion Papers 7/2008, Bank of Finland, Institute for Economies in Transition.
- Fidrmuc, Jarko & Batorova, Ivana, 2008. "China in the World Economy: Dynamic Correlation Analysis of Business Cycles," Working Paper Series RP2008/02, World Institute for Development Economic Research (UNU-WIDER).
- Arthur F. Burns & Wesley C. Mitchell, 1946. "Measuring Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number burn46-1.
- Marianne Baxter & Michael Kouparitsas, 2004.
"Determinants of business cycle comovement: a robust analysis,"
Working Paper Series
WP-04-14, Federal Reserve Bank of Chicago.
- Baxter, Marianne & Kouparitsas, Michael A., 2005. "Determinants of business cycle comovement: a robust analysis," Journal of Monetary Economics, Elsevier, vol. 52(1), pages 113-157, January.
- Marianne Baxter & Michael A. Kouparitsas, 2004. "Determinants of Business Cycle Comovement: A Robust Analysis," NBER Working Papers 10725, National Bureau of Economic Research, Inc.
- Frankel, Jeffrey A & Rose, Andrew K, 1998.
"The Endogeneity of the Optimum Currency Area Criteria,"
Royal Economic Society, vol. 108(449), pages 1009-25, July.
- Jeffrey A. Frankel & Andrew K. Rose, 1996. "The Endogeneity of the Optimum Currency Area Criteria," NBER Working Papers 5700, National Bureau of Economic Research, Inc.
- Frankel, Jeffrey A & Rose, Andrew K, 1996. "The Endogeneity of the Optimum Currency Area Criteria," CEPR Discussion Papers 1473, C.E.P.R. Discussion Papers.
- Anderson, Heather M. & Vahid, Farshid, 1998. "Testing multiple equation systems for common nonlinear components," Journal of Econometrics, Elsevier, vol. 84(1), pages 1-36, May.
- Brian M. Doyle & Jon Faust, 2002. "An investigation of co-movements among the growth rates of the G-7 countries," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Oct, pages 427-437.
- Terasvirta, T & Anderson, H M, 1992. "Characterizing Nonlinearities in Business Cycles Using Smooth Transition Autoregressive Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 7(S), pages S119-36, Suppl. De.
- Hamilton, James D, 1989. "A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle," Econometrica, Econometric Society, vol. 57(2), pages 357-84, March.
- Soyoung Kim & Jong‐Wha Lee & Cyn‐Young Park, 2011.
"Emerging Asia: Decoupling or Recoupling,"
The World Economy,
Wiley Blackwell, vol. 34(1), pages 23-53, 01.
- Kapetanios, George & Shin, Yongcheol & Snell, Andy, 2003. "Testing for a unit root in the nonlinear STAR framework," Journal of Econometrics, Elsevier, vol. 112(2), pages 359-379, February.
- Granger, Clive W J, 1993. "Strategies for Modelling Nonlinear Time-Series Relationships," The Economic Record, The Economic Society of Australia, vol. 69(206), pages 233-38, September.
- Koop, Gary & Pesaran, M. Hashem & Potter, Simon M., 1996. "Impulse response analysis in nonlinear multivariate models," Journal of Econometrics, Elsevier, vol. 74(1), pages 119-147, September.
- James H. Stock & Mark W. Watson, 2003.
"Understanding Changes in International Business Cycle Dynamics,"
NBER Working Papers
9859, National Bureau of Economic Research, Inc.
- James H. Stock & Mark W. Watson, 2005. "Understanding Changes In International Business Cycle Dynamics," Journal of the European Economic Association, MIT Press, vol. 3(5), pages 968-1006, 09.
- Todd E. Clark & Eric van Wincoop, 1999.
"Borders and business cycles,"
91, Federal Reserve Bank of New York.
- Kalemli-Ozcan, Sebnem & Sorensen, Bent E. & Yosha, Oved, 2001. "Economic integration, industrial specialization, and the asymmetry of macroeconomic fluctuations," Journal of International Economics, Elsevier, vol. 55(1), pages 107-137, October.
- Arango, Luis E. & Melo, Luis F., 2006. "Expansions and contractions in Brazil, Colombia and Mexico: A view through nonlinear models," Journal of Development Economics, Elsevier, vol. 80(2), pages 501-517, August.
When requesting a correction, please mention this item's handle: RePEc:jau:wpaper:2011/03. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (María Aurora Garcia Gallego)
If references are entirely missing, you can add them using this form.