Interdependence Of Cycles Research Articles

Mapping the Global Business Cycle Network

We build a weighted network of business cycle similarities across countries and assess its main quantitative properties. Business cycle similarity is measured at the annual frequency using the Euclidean distance. Network analysis is well suited to map the full set of pairwise similarities at an annual frequency. We find that the global business cycle network has become more dense and more homogeneous over time, reflecting global trends such as rising trade and financial integration. At the same time, similarity exhibits a jagged pattern, underscoring the importance of also taking into account short-term factors to explain the dynamics of global business cycle interdependence. Unlike earlier studies focused on aggregate measures of similarity, our empirical approach is able to uncover and assess both the long-term trend rise and the short-term pattern of business cycle similarity.

Business Cycle and Financial Cycle Interdependence and the Rising Role of China in SAARC

In this paper, we examine the dynamic interdependence via growth spillovers between financial cycle represented by real bank credit growth and business cycle as real GDP growth using dynamic spillover index of Diebold and Yilmaz (Int J Forecast 28(1):57–66, 2012). Using quarterly data on five SAARC (the South Asian Association for Regional Cooperation) countries over the period 1975Q4-2013Q4, the study reports following empirical regularities: First, there is a limited interdependence between business and financial cycles within SAARC nations. The pattern of dependence is almost homogeneous. Second, the results of across SAARC indicate that the magnitude of dynamic relationship is not as high as studies have reported in the case of other economic interests groups. Third, to credit-growth spillover, India appears to be the primary driver of economic and financial integrations followed by Bangladesh and Pakistan. Fourth, the spillover analysis between SAARC countries and China reveals that the directional interdependence is relatively higher than the SAARC alone. Among macroeconomic indicators, we find that government debt to GDP, inflation and interest rate are the primary determinants of credit growth spillover. Among financial development indicators, the number of mobile subscribers and number of bank branches as financial inclusion variables appears as significant determinants of credit growth spillover than the portfolio equity assets and remittances.

Dynamics of global business cycle interdependence

In this paper, we provide a comprehensive analysis of the time-varying interdependence among the economic cycles of the major world economies during the post-Great Moderation period. We document a significant increase in the global business cycle interdependence occurred in the early 2000s. Such increase is mainly attributed to the emerging market economies, since their business cycles became more synchronized with the rest of the world around that time. Moreover, we find that the increase in global interdependence is highly related to decreasing differences in sectoral composition among countries.

Credit and business cycles: Causal effects in the frequency domain

The history of economic recessions has shown that every deep downturn has been accompanied by disruptions in the financial sector. Paradoxically, up until the financial world crisis of 2007–2009, little attention was given to macroeconomic and financial interdependence. In this paper, a study is conducted on the relationship between financial and real business cycles for a sample of thirty-three countries in the frequency domain. Specifically, the features of the interdependence of credit and output cycles are analysed and Granger-type causality tests are carried out in the frequency domain. The main findings of the study indicate that the likelihood of cycle interdependence is highest when considering medium and long-term frequencies, and that Granger causality runs in both directions.

Emerging markets in the global economic network: Real(ly) decoupling?

We evaluate the degree of business cycle interdependence in the global economic network, focusing on the hypothesis that emergent market (EM) economies have decoupled from advanced economies in the recent period of globalization. We employ a novel methodological approach to the study of business cycles synchronization that combines network analysis and dynamic correlations. We find a process of increasing transnational interdependence within and across all economic development groups. Our results suggest that EM do not form a cohesive group and support the view of an increasingly multipolar and interdependent global economic network.

The myth of decoupling

The decoupling hypothesis is the idea that business cycles in emerging market economies have become more independent from business cycles in advanced economies in recent years. Decoupling essentially amounts to a structural break in the degree of business cycle interdependence between the two groups of economies, and it can be tested as such. We develop an innovative measure of business cycle interdependence based on the Euclidean distance, available at the annual frequency, which allows for a proper test for a structural break in a graphical setup. We also make use of a standard econometric test. Both approaches point to the same conclusion: there has been no decoupling in recent years. If anything, the degree of business cycle interdependence has become stronger.

International Business Cycle Spillovers

This paper studies business cycle interdependence among the industrialized countries since 1958. Using the spillover index methodology recently proposed by Diebold and Yilmaz (2009a) and based on the generalized VAR framework, we develop an alternative measure of comovement of macroeconomic aggregates across countries. We have several important results. First, the spillover index fluctuates over time, increasing substantially following the post-1973 U.S. recessions. Secondly, the band within which the spillover index fluctuates follows an upward trend since the start of the globalization process in the early 1990s. Thirdly, the spillover index recorded the sharpest increase ever following the peak of the global financial crisis in September 2008, reaching a record level as of December 2008. We also derive measures of directional spillovers and show that the U.S. (1980s and 2000s) and Japan (1970s and 2000s) are the major transmitters of shocks to other countries. Finally, during the current global economic recession shocks mostly originated from the United States and spread to other industrialized countries.

Preimplantation urinary hormone profiles and the probability of conception in healthy women

Objective: To examine hormonal predictors of conception in menstrual cycles from normal women. Design: Longitudinal study. Setting: Community. Patient(s): Two hundred fifteen healthy female volunteers with no known fertility problems who were trying to conceive. Intervention(s): Participants recorded menstrual bleeding, sexual intercourse, and collected first morning urine specimens daily from when they stopped contraception until they became pregnant or for 6 months if no clinical pregnancy was achieved. Measurements were made of urinary LH and urinary metabolites of estrogen and progesterone. Main Outcome Measure(s): Conception was identified by a sensitive and specific immunoradiometric assay for urinary hCG. Result(s): Statistical analyses of 189 conception and 409 nonconception cycles controlled for sexual intercourse and interdependence of cycles from the same woman. Conception was more likely in cycles with lower baseline progesterone metabolite levels, higher ovulatory LH, and higher midluteal progesterone. Midluteal estrogen also was elevated in conception cycles when examined without adjusting for other hormone levels, but this finding did not persist after multivariate adjustment. Conclusions: Menstrual cycles in normal women vary in their hormonal quality in ways that are predictive of cycle fertility.