Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
986407 | Review of Economic Dynamics | 2011 | 20 Pages |
Abstract
We examine the driving forces of G-7 business cycles. We decompose national business cycles into common and nation-specific components using a dynamic factor model. We also do this for driving variables found in business cycle models: productivity; measures of fiscal and monetary policy; the terms of trade and oil prices. We find a large common factor in oil prices, productivity, and the terms of trade. Productivity is the main driving force, with other drivers isolated to particular nations or sub-periods. Along these lines, we document shifts in the correlation of the common component of each driver with the overall G-7 cycle.
Related Topics
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Authors
Mario J. Crucini, M. Ayhan Kose, Christopher Otrok,