Dynamics of Global Business Cycles Interdependence

52 Pages Posted: 18 Nov 2015

See all articles by Lorenzo Ductor

Lorenzo Ductor

University of Granada

Danilo Leiva-Leon

Central Bank of Chile

Date Written: July 01, 2015


In this paper, we rely on regime-switching models to 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 structural increase in the global business cycles interdependence occurred in the early 2000s. A clustering analysis reveals that 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 break in global interdependence can be explained by decreasing differences in sectoral composition among countries, specifically in the agricultural component.

Suggested Citation

Ductor, Lorenzo and Leiva-Leon, Danilo, Dynamics of Global Business Cycles Interdependence (July 01, 2015). Available at SSRN: https://ssrn.com/abstract=2691698 or http://dx.doi.org/10.2139/ssrn.2691698

Lorenzo Ductor

University of Granada ( email )

Facultad de Ciencias Económicas
Campus de la Cartuja
Granada, Granada 18071

Danilo Leiva-Leon (Contact Author)

Central Bank of Chile ( email )

Research Department
Huerfanos 1185

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