What are the driving forces of international business cycles?

Mario Crucini (), Ayhan Kose and Christopher Otrok

Review of Economic Dynamics, 2011, vol. 14, issue 1, 156-175

Abstract: We examine the driving forces of G-7 business cycles. We decompose national business cycles into common and nation-specific components using a dynamic factor model. We also do this for driving variables found in business cycle models: productivity; measures of fiscal and monetary policy; the terms of trade and oil prices. We find a large common factor in oil prices, productivity, and the terms of trade. Productivity is the main driving force, with other drivers isolated to particular nations or sub-periods. Along these lines, we document shifts in the correlation of the common component of each driver with the overall G-7 cycle. (Copyright: Elsevier)

Keywords: International business cycles; Productivity shocks; Oil prices; Stochastic dynamic general equilibrium; Bayesian estimation; Factor model (search for similar items in EconPapers)
JEL-codes: E3 F44 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (159)

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Working Paper: What Are the Driving Forces of International Business Cycles? (2008)
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DOI: 10.1016/j.red.2010.09.001

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