What Are the Driving Forces of International Business Cycles?

Mario Crucini (), Ayhan Kose and Christopher Otrok

No 815, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

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.

Keywords: International business cycle; Bayesian factor model; productivity monetary policy; fiscal policy (search for similar items in EconPapers)
JEL-codes: E32 F00 F41 (search for similar items in EconPapers)
Date: 2008-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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http://www.accessecon.com/pubs/VUECON/vu08-w15.pdf First version, 2008 (application/pdf)

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 (2009)
Working Paper: What Are the Driving Forces of International Business Cycles? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0815

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