If the United States sneezes, does the world need “pain-killers”?

Maria Jesus Herrerias () and Javier Ordóñez

International Review of Economics & Finance, 2014, vol. 31, issue C, 159-170

Abstract: In this paper we analyze the extent to which the US economy affects international business fluctuations across countries and we ask whether the nonlinear nature of the business cycle affects the degree of co-movement between countries. A multivariate nonlinear LSTAR model is estimated for the GDP cyclical components of China, France, Germany, the UK and the US. This nonlinear framework allows the asymmetries of the business cycle to be captured properly to identify the synchronization behavior across countries. Our results suggest that there is a relevant influence of the US cycle, specifically during recessions.

Keywords: Business cycle; Nonlinearities; Synchronization; Decoupling (search for similar items in EconPapers)
JEL-codes: C32 E32 F15 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:31:y:2014:i:c:p:159-170

DOI: 10.1016/j.iref.2014.01.015

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