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Ongoing Changes in the Business Cycle: Evidence and Causes

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  • Thomas Dalsgaard
  • Jørgen Elmeskov
  • Cyn-Young Park

Abstract

This paper first reviews a number of stylised facts concerning OECD country business cycles over the past four decades. In general, the amplitude of business cycles has fallen, driven mainly by declining fluctuations of domestic demand. As a result, international divergencies of cyclical positions have diminished but, outside the euro area, there is little evidence of increased synchronisation of cycles. The paper then reviews a number of influences on business cycles. The evidence suggests that, on balance, features of macroeconomic policies may have tended to reduce cyclical volatility and structural changes, notably the increased share of the service sector in the economies, have also tended to dampen the cycle. More recently, there are signs that financial market prices have increasingly moved in sympathy across countries, and the final section of the paper illustrates how this could affect the international transmission of cyclical shocks and the associated need for policy ... Changements continus du cycle économique - faits et causes Ce document commence par présenter un certain nombre de faits typiques concernant les cycles économiques des pays de l’OCDE de ces quatre dernières décennies. En général, l’amplitude des cycles économiques a diminué en raison principalement de la baisse des fluctuations de la demande intérieure. Ceci a entraîné une réduction des divergences internationales des positions cycliques, bien que, en dehors de la zone euro, il n’est pas évident que la synchronisation des cycles ait augmenté. Ce document examine ensuite les diverses influences sur les cycles de l’économie. Quelques aspects des politiques macro-économiques peuvent avoir eu tendance à réduire la volatilité cyclique et les changements structurels, notamment l’augmentation de la part du secteur des services dans les économies, a aussi contribué à atténuer le cycle. Plus récemment, certains signes indiquent que les prix du marché financier ont de plus en plus tendance à évoluer de façon similaire dans les différents pays. La ...

Suggested Citation

  • Thomas Dalsgaard & Jørgen Elmeskov & Cyn-Young Park, 2002. "Ongoing Changes in the Business Cycle: Evidence and Causes," OECD Economics Department Working Papers 315, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:315-en
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    File URL: http://dx.doi.org/10.1787/480377612415
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    Keywords

    business cycles; cycle économique; international linkages; liaisons internationales; macroeconomic policies; politique macro-économique;

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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