Ongoing changes in the business cycle - evidence and causes

Thomas Dalsgaard, Jørgen Elmeskov and Cyn-Young Park ()

No 20 in SUERF Studies from SUERF - The European Money and Finance Forum, edited by Morten Balling

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 response.

JEL-codes: E30 E32 E44 E63 F41 (search for similar items in EconPapers)
Date: 2002
ISBN: 978-3-902109-12-5
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Related works:
Working Paper: Ongoing Changes in the Business Cycle: Evidence and Causes (2002)
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