Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108617
Authors: 
Hirata, Hideaki
Kose, M. Ayhan
Otrok, Christopher
Year of Publication: 
2013
Series/Report no.: 
Koç University-TÜSİAD Economic Research Forum Working Paper Series 1302
Abstract: 
Both global and regional economic linkages have strengthened substantially over the past quarter century. We employ a dynamic factor model to analyze the implications of these linkages for the evolution of global and regional business cycles. Our model allows us to assess the roles played by the global, regional, and country-specific factors in explaining business cycles in a large sample of countries and regions over the period 1960-2010. We find that, since the mid-1980s, the importance of regional factors has increased markedly in explaining business cycles especially in regions that experienced a sharp growth in intra-regional trade and financial flows. By contrast, the relative importance of the global factor has declined over the same period. In short, the recent era of globalization has witnessed the emergence of regional business cycles.
Subjects: 
business cycles
comovement
synchronization
trade linkages
financial linkages
JEL: 
C11
C32
E32
F41
F42
Document Type: 
Working Paper

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