International Business Cycle Synchronization in Historical Perspective
In this paper, we review and attempt to explain the changes in business cycle synchronization among 16 industrial countries and the over the past century and a quarter, demarcated into four exchange rate regimes. We find that there is a secular trend towards increased synchronization for much of the twentieth century and that it occurs across diverse exchange rate regimes. This finding is in marked contrast to much of the recent literature, which has focused primarily on the evidence for the past 20 or 30 years and which has produced mixed results. We then examine the role of global shocks and shock transmission in the trend toward synchronization. Our key finding here is that global (common) shocks generally are the dominant influence.
This is a revised version of a paper prepared for the International Symposium on Business Cycle Behaviour in Historical Perspective, University of Manchester, June 29-30, 2009. We are grateful to Matteo Ciccarelli for comments on an earlier draft of the paper and two referees for helpful suggestions. The views presented in the paper reflect only those of the authors and should not be attributed to the IMF or IMF policy. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- The global economy has shown a steady increase in business cycle synchronization over [the past 125 years]. Michael Bordo and...
Michael D. Bordo & Thomas F. Helbling, 2011. "International Business Cycle Synchronization In Historical Perspective," Manchester School, University of Manchester, vol. 79(2), pages 208-238, 03. citation courtesy of