Are They All in the Same Boat? The 2000-2001 Growth Slowdown and the G-7 Business Cycle Linkages

By Thomas Helbling, Tamim A. Bayoumi. Social Science Research Network, 2003

142 citations recorded by the source corpus.

This paper reviews the international business cycle among Group of Seven (G-7) countries since 1973 from two angles. An examination of business cycle synchronization among these countries using simple descriptive statistics shows that synchronized slowdowns have been the norm rather than the exception and that the slowdown in 2000-2001 largely followed patterns seen in the past. The paper also identifies the international business cycle with an asymptotic dynamic factor model. Two global factors explain roughly 80 percent of the variance in G-7 output gaps at business cycle frequencies. The factor model decomposes the "common part" of national output fluctuations into two factors, one capturing the average G-7 cycle and one that corrects for phase and amplitude differences. We also found some evidence supporting the hypothesis that global shocks were the main force behind the slowdown in 2000-2001.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/ade6b7579db8a5b5d77db742ce7ce430a3a50eac

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. Nouriel Roubini
2. Thomas Helbling
3. M. Bordo
4. Asli Demirgüç-Kunt
5. A. Posen
6. G. Peersman

In Finance

1. Nouriel Roubini
2. Thomas Helbling
3. M. Bordo

Citations in the corpus

• Business Cycle Transmission from the US to Germany: A Structural Factor Approach (2007, unknown): “28 Helbling and Bayoumi (2003) find a similarly large influence of unification period.”
• Do institutional changes affect business cycles?: evidence from Europe (2012, unknown): “Two important differences between (4) and standard factor models need to be noted.”
• HAVE NATIONAL BUSINESS CYCLES BECOME MORE SYNCHRONIZED (2003, background): “For example, in the most recent slowdown, output growth started to - 5 - weaken at about the same time in the major advanced economies (e.g., Helbling and Bayoumi, 2003).”
• Understanding Changes in International Business Cycle Dynamics (2005, unknown): “, the UK, and the US (Helbling and Bayoumi 2003).”
• Why Central Banks Should Burst Bubbles (2006, background): “A number of studies (IMF 2000, 2003; Bordo and Jeanne 2002; Borio and Lowe 2002; Bordo 2003; Helbling and Bayoumi 2003) suggest that credit booms and busts and asset price booms and busts can have severe financial and economic consequences.”
• Breaks in the Variability and Comovement of G-7 Economic Growth (2003, unknown): “Among the published results are Ambler, Cardia, and Zimmermann (2004), Stock and Watson (forthcoming, 2004) Bayoumi and Helbling (2003), Kose, Otrok, and Whiteman (2003a, 2003b), Luginbuhl and Koopman (2003), Del Negro and Otrok (2003), Heathcote and Perri (2003), Kose, Prasad, and Terrones (2003),…”
• Similarities and Convergence in G-7 Cycles (2007, unknown): “For example, Helbling and Bayoumi (2003) suggest that the increase in cyclical synchronization observed after 2000 in advanced economies is the result of common shocks.”
• Business Cycle Synchronization in the Enlarged EU (2008, unknown): “…countries tend to have more volatile cycles than large 11 See, for example, Gregory et al. (1997), Stock and Watson (1998), Forni and Reichlin (1998), Gregory and Head (1999), Forni et al. (2000), Kose et al. (2003), Monfort et al. (2003), Helbling and Bayoumi (2003) and Giannone et al. (2003).”