What are the driving forces of international business cycles

Christopher Otrok, Ayhan Kose and Mario Crucini ()

No 820, 2009 Meeting Papers from Society for Economic Dynamics

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 G-7 component of each driver with the overall G-7 cycle.

Date: 2009
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Related works:
Journal Article: What are the driving forces of international business cycles? (2011)
Working Paper: What Are the Driving Forces of International Business Cycles? (2008)
Working Paper: What Are the Driving Forces of International Business Cycles? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed009:820

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