US macroeconomic shocks and international business cycle

Grzegorz Wesołowski and Oleg Gurshev

No 2025-06, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: This paper estimates the role of six shocks originating in the United States in driving the international business cycle. To this end, it employs impulse response functions and forecast error variance decomposition from panel local projections. We find that key macroeconomic shocks originating in the United States contribute significantly to business cycle synchronization between the US and other economies. These shocks also account for a substantial part of output fluctuations in these economies. Considering individual shock contributions, we document that technology and monetary policy innovations are of the highest relevance.

Keywords: Macroeconomic shocks; International spillovers; International business cycles; Technology shocks; Monetary policy; Financial shocks; Fiscal policy; Investment shocks (search for similar items in EconPapers)
JEL-codes: E23 E32 E52 E62 F44 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2025-06

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