Global business cycles convergence or decoupling kose m ayhan prasad eswar otrok christopher. EconPapers: Global Business Cycles: Convergence or Decoupling? 2019-03-11

Global business cycles convergence or decoupling kose m ayhan prasad eswar otrok christopher Rating: 7,1/10 1085 reviews

GLOBAL BUSINESS CYCLES: CONVERGENCE OR DECOUPLING? *, International Economic Review

global business cycles convergence or decoupling kose m ayhan prasad eswar otrok christopher

We would like to thank Mark Aguiar, Stijn Claessens, Selim Elekdag, Charles Engel, Linda Goldberg, Massimiliano Marcellino, Fabrizio Perri, Mark Watson, and three anonymous referees for useful comments. We categorize the 106 countries in our sample into three groups-industrial countries, emerging markets, and other developing economies. Working Papers describe research in progress by the author s and are published to elicit comments and to further debate Summary: This paper analyzes the evolution of the degree of global cyclical interdependence over the period 1960-2005. This is most evident in the increasing correlation of stock market fluctuations around the world. Our main result is that, during the period of globalization 1985-2005 , there has been some convergence of business cycle fluctuations among the group of industrial economies and among the group of emerging market economies. We conclude that there is evidence of business cycle convergence within each of these two groups of countries but divergence or decoupling between them. A second issue concerns the distinction between real and financial decoupling.

Next

GLOBAL BUSINESS CYCLES: CONVERGENCE OR DECOUPLING?*

global business cycles convergence or decoupling kose m ayhan prasad eswar otrok christopher

Our main result is that, during the period of globalization 1985-2005 , there has been some convergence of business cycle fluctuations among the group of industrial economies and among the group of emerging market economies. These are: i a global factor, which picks up fluctuations that are common across all variables and countries; ii three group-specific factors, which capture fluctuations that are common to all variables and all countries within each group of countries; iii country factors, which are common across all aggregates in a given country; and iv idiosyncratic factors specific to each time series. Steep drops in the Shanghai stock market now affect U. Surprisingly, there has been a concomitant decline in the relative importance of the global factor. Using a dynamic factor model, we then decompose macroeconomic fluctuations in key macroeconomic aggregates -- output, consumption, and investment -- into different factors. We categorize the 106 countries in our sample into three groups—industrial countries, emerging markets, and other developing economies.

Next

EconPapers: Global Business Cycles: Convergence or Decoupling?

global business cycles convergence or decoupling kose m ayhan prasad eswar otrok christopher

By 2016 Another possibility is that financial markets in these countries are still relatively small and disconnected from the real economy. The flip side of this argument, however, is that their financial systems may not be strong enough to cushion these economies if more negative shocks hit them. These are: i a global factor, which picks up fluctuations that are common across all variables and countries; ii three group-specific factors, which capture fluctuations that are common to all variables and all countries within each group of countries; iii country factors, which are common across all aggregates in a given country; and iv idiosyncratic factors specific to each time series. Author: M Ayhan Kose; Christopher Otrok; Eswar Prasad; National Bureau of Economic Research Publisher: Cambridge, Mass. Using a dynamic factor model, we then decompose macroeconomic fluctuations in key macroeconomic aggregates -- output, consumption, and investment -- into different factors. Using a dynamic factor model, we then decompose macroeconomic fluctuations in key macroeconomic aggregates—output, consumption, and investment—into different factors.

Next

The Financial Crisis and Emerging Markets

global business cycles convergence or decoupling kose m ayhan prasad eswar otrok christopher

Here the answers are less clear. So there could be trouble brewing. Using a dynamic factor model, we then decompose macroeconomic fluctuations in key macroeconomic aggregates—output, consumption, and investment—into different factors. We categorize the 106 countries in our sample into three groups -- industrial countries, emerging markets, and other developing economies. Our main result is that, during the period of globalization 1985-2008 , there has been some convergence of business cycle fluctuations among the group of industrial economies and among the group of emerging market economies. In other words, there is evidence of business cycle convergence within each of these two groups of countries but divergence or decoupling between them.

Next

EconPapers: Global Business Cycles: Convergence or Decoupling?

global business cycles convergence or decoupling kose m ayhan prasad eswar otrok christopher

And the cataclysmic events on Wall Street are clearly roiling financial markets worldwide. Global Business Cycles: Convergence or Decoupling? And the huge increase in flows of goods and money among emerging markets themselves rather than just between them and industrial countries has made their economies more dependent on each other. In other words, there is evidence of business cycle convergence within each of these two groups of countries but divergence or decoupling between them. Our main result is that, during the period of globalization 1985-2005 , there has been some convergence of business cycle fluctuations among the group of industrial economies and among the group of emerging market economies. Using a dynamic factor model, we then decompose macroeconomic fluctuations in key macroeconomic aggregates-output, consumption, and investment-into different factors. We conclude that there is evidence of business cycle convergence within each of these two groups of countries but divergence or decoupling between them. Surprisingly, there has been a concomitant decline in the relative importance of the global factor.

Next

Staff View: Global business cycles :

global business cycles convergence or decoupling kose m ayhan prasad eswar otrok christopher

We categorize the 106 countries in our sample into three groups -- industrial countries, emerging markets, and other developing economies. Indeed, in a striking reversal of fortunes, continued strong growth in emerging markets might help stir the industrial economies out of their own malaise. Surprisingly, there has been a concomitant decline in the relative importance of the global factor. Their stock markets have been infected by the turmoil in the U. Remarkably, however, there is a decoupling of common business cycles between these two groups. Our main result is that, during the period of globalization 1985-2005 , there has been some convergence of business cycle fluctuations among the group of industrial economies and among the group of emerging market economies.

Next

Global Business Cycles: Convergence or Decoupling?

global business cycles convergence or decoupling kose m ayhan prasad eswar otrok christopher

We find that during 1985—2008, there is some convergence of business cycle fluctuations among industrial economies and among emerging market economies. We analyze the evolution of the degree of global cyclical interdependence over the period 1960—2008. Using a dynamic factor model, we then decompose macroeconomic fluctuations in key macroeconomic aggregates-output, consumption, and investment-into different factors. In other words, there is evidence of business cycle convergence within each of these two groups. Surprisingly, there is a concomitant decline in the relative importance of the global factor.

Next

The Financial Crisis and Emerging Markets

global business cycles convergence or decoupling kose m ayhan prasad eswar otrok christopher

Surprisingly, there is a concomitant decline in the relative importance of the global factor. We categorize the 106 countries in our sample into three groups-industrial countries, emerging markets, and other developing economies. Our main result is that, during the period of globalization 1985-2005 , there has been some convergence of business cycle fluctuations among the group of industrial economies and among the group of emerging market economies. One thing that is clear is that the structure of the world economy is changing in important ways, with effects that are difficult to predict. The answer has implications not just for the emerging markets but also for world growth since these economies have now become major players on the global economic stage. These are: i a global factor, which picks up fluctuations that are common across all variables and countries; ii three group-specific factors, which capture fluctuations that are common to all variables and all countries within each group of countries; iii country factors, which are common across all aggregates in a given country; and iv idiosyncratic factors specific to each time series.

Next