University of Melbourne
Synchronization of Business Cycles in the G7 Countries: Evidence from Bayesian Analysis of Markov Switching Models
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Keywords: Markov; Regime-switching; Business cycle; Synchronisation; Bayesian inference.
JEL Classifications: C11, C22, E32
This paper uses Bayesian estimates of Markov switching models to analyze the question of whether business cycles in the G7 countries appear to be synchronized. The Markov switching model generates peak and trough dates that are in reasonable agreement with established business cycle chronologies. However, we find no evidence for common business cycles between the United States and the other six countries. In other words, these country pairs do not seem to be in the same business cycle phase any more or less than would be expected through chance alone.
PDF file of paper: smith_abstract.pdf
Session: Empirical Analyses of Business Cycles
Time: Friday, 6 July, 3:30pm - 5pm