| International Business Cycles: World, Region, (2003) | |||||||||||||||
Abstract | |||||||||||||||
| The paper investigates the common dynamic properties of business cycle fluctuations across countries, regions, and the world. We employ a Bayesian dynamic latent factor model to estimate common components in macroeconomic aggregates (output, consumption and investment) in a sixty-country sample covering seven regions of the world. The results indicate that a common world factor is an important source of volatility for aggregates in most countries, providing evidence for a world business cycle. We find that region-specific factors play only a minor role in explaining fluctuations in economic activity. We also document similarities and differences across regions, countries and aggregates. (JEL F41, E32, C11, C32) Is there a world business cycle? Recent studies have indeed provided evidence that there are many cross-country links in macroeconomic fluctuations. | |||||||||||||||
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