Working papers, Department of Economics, WU (Wirtschaftsuniversität Wien)
Business Cycle Synchronization During US Recessions Since the Beginning of the 1870's
Abstract: This paper examines the synchronization of business cycles
across the G7 countries during US recessions since the 1870's. Using a
dynamic measure of business cycle synchronization, results depend on the
globalisation period under consideration. On average, US recessions have
significantly positive effects on business cycle co-movements only in the
period following the breakdown of the Bretton Woods system of fixed
exchange rates, while strongly decoupling effects among the G7 economies
are documented during recessions that occurred under the classical Gold
Standard. During the 2007-2009 recession, business cycles co-movements
increased to unprecedented levels.
Keywords: Dynamic conditional correlation, Business cycle synchronization, Recession, Globalisation; (follow links to similar papers)
JEL-Codes: E3,; E32,; F4,; F41,; N10; (follow links to similar papers)
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