Hodrick-Prescott Filtering of Large Emerging Economies and Decoupling Hypothesis

Olga Mezentceva

A chapter in New Topics in Emerging Markets from IntechOpen

Abstract: The aim of this chapter is to summarize our researches about economic growth in large emerging economies: Russia, India, and China. There were launched back in 2014. Since the 2008 crisis, there has been speculation that large emerging economies have built up sufficient economic capacity and that emerging economies' economic cycles have become more independent of developed economies. However, our studies have shown that at the time of 2014-2015, the economic growth of large developing economies had too different qualitative characteristics to speak about the synchronization of economic cycles and confirm the decoupling hypothesis. In addition, we predicted a slowdown in China and extremely weak economic growth in Russia as early as 2014. However, the Russian-Ukrainian conflict and unprecedented anti-Russian sanctions artificially led to greater cooperation and communication between large emerging economies. Contrary to expectations, the Russian economy has shown its resilience, and economic ties between China and Russia, and India and Russia have strengthened. The main result of this research is that we have shown that, in addition to the indicator of economic growth, its qualitative characteristics are much more important. Until international cooperation occurs on a qualitative basis of economic growth, the decoupling hypothesis cannot be confirmed.

Keywords: geoeconomic fragmentation; Hodrik-Preskott filtering; economics cycle; decoupling hypothesis; output gap (search for similar items in EconPapers)
JEL-codes: O10 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ito:pchaps:314920

DOI: 10.5772/intechopen.112176

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