Does Asymmetry of International Shocks Matter for the U.S. Business Cycle?

Edward N. Gamber and Juann H. Hung

Economic Inquiry, 2004, vol. 42, issue 4, 647-666

Abstract: This article proposes and investigates the asymmetry hypothesis, which predicts that an international asymmetric shock tends to have a stronger and longer effect on the U.S. business cycle than a symmetric shock. The hypothesis finds empirical support in the impulse responses of U.S. output and inflation to symmetric and asymmetric shocks; those responses are estimated in a four-variable structural vector autoregression. The hypothesis also finds support in stylized facts: The longest U.S. expansions have tended to occur when the rest of the world was growing below potential. (JEL E3, E5, E4) Copyright 2004, Oxford University Press.

JEL-codes: E3 E4 E5 (search for similar items in EconPapers)
Date: 2004
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