One Ring to Rule Them All? New Evidence on World Cycles

37 Pages Posted: 8 Nov 2019

See all articles by Eric Monnet

Eric Monnet

Banque de France; Paris School of Economics (PSE)

Damien Puy

International Monetary Fund (IMF)

Date Written: September 2019


We estimate world cycles using a new quarterly dataset of output, credit and asset prices assembled using IMF archives and covering a large set of advanced and emerging economies since 1950. World cycles, both real and financial, exist and are generally driven by US shocks. But their impact is modest for most countries. The global financial cycle is also much weaker when looking at credit rather than asset prices. We also challenge the view that syncronization has increased over time. Although this is true for prices (goods and assets), this not true for quantities (output and credit). The world business and credit cycles were as strong during Bretton Woods (1950-1972) as during the Globalization period (1984-2006). For most countries, the way their output co-moves with the rest of the world has changed little over the last 70 years. We discuss the reasons behind these new findings and their policy implications for small open economies.

Keywords: Economic integration, Economic policy, Financial crises, Economic systems, Financial statistics, World Cycles, Business Cycles, Financial Cycles, Financial integration, Trade integration, Globalization, US Monetary Policy., WP, world cycle, GFC, asset price, domestic output, financial variable

JEL Classification: E32, F41, F42, E01, E52, P, O24, C43

Suggested Citation

Monnet, Eric and Puy, Damien, One Ring to Rule Them All? New Evidence on World Cycles (September 2019). IMF Working Paper No. 19/202, Available at SSRN:

Eric Monnet (Contact Author)

Banque de France ( email )


Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014

Damien Puy

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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