Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/55206 
Authors: 
Year of Publication: 
2010
Series/Report no.: 
Working Paper No. 663
Publisher: 
Queen Mary University of London, School of Economics and Finance, London
Abstract: 
Classical business cycles, following Burns and Mitchell (1946), can be defined as the sequential pattern of expansions and contractions in aggregate economic activity. Recently, Harding and Pagan (2002, 2006) have provided an econometric toolkit for the analysis of these cycles, and this has resulted in a recent surge in researchers using these methods to analyse developing country business cycles. However, the existing literature consists of diminutive samples and the majority fail to consider the statistical significance of the concordance statistics. To address this shortfall, this paper examines the business cycle characteristics and synchronicity for thirty-two developing countries. Furthermore, the US, the UK and Japan are included; this provides benchmarks upon which to compare the characteristics of the developing country cycles and also to examine the degree of synchronisation between developed and developing countries. Significantly, this research reveals that business cycles of developing countries are not, as previously believed, significantly shorter than those of the developed countries. However, the amplitude of both expansion and contraction phases tends to be greater in the developing countries. Furthermore a clear relationship between the timing of business cycle fluctuations and periods of significant regional crises, such as the Asian Financial Crisis, is exhibited. However, the more specific timing of the onset of these fluctuations appears to be determined by country-specific factors. Moreover, there are no clear patterns of concordance either within regions or between developed and developing country business cycles.
Subjects: 
classical business cycle
turning points
synchronisation
concordance
contagion
developing economies
JEL: 
C14
C41
E32
O50
Document Type: 
Working Paper

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