Globalization, the Business Cycle, and Macroeconomic Monitoring

WPIEA2011025 Image
Price:  $18.00

Author/Editor: S. Boragan Aruoba, Marco Terrones, Ayhan Kose, Francis X. Diebold
Release Date: © February, 2011
ISBN : 978-1-45521-672-7
Stock #: WPIEA2011025
Stock Status: On back-order

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We propose and implement a framework for characterizing and monitoring the global business cycle. Our framework utilizes high-frequency data, allows us to account for a potentially large amount of missing observations, and is designed to facilitate the updating of global activity estimates as data are released and revisions become available. We apply the framework to the G-7 countries and study various aspects of national and global business cycles, obtaining three main results. First, our measure of the global business cycle, the common G-7 real activity factor, explains a significant amount of cross-country variation and tracks the major global cyclical events of the past forty years. Second, the common G-7 factor and the idiosyncratic country factors play different roles at different times in shaping national economic activity. Finally, the degree of G-7 business cycle synchronization among country factors has changed over time.


Business cycles , Economic cooperation , Economic development , Globalization

More publications in this series: Working Papers

More publications by: S. Boragan Aruoba ; Marco Terrones ; Ayhan Kose ; Francis X. Diebold