The paper investigates the common dynamic properties of business-cycle fluctuations across countries, regions, and the world. We employ a Bayesian dynamic latent factor model to estimate common components in macroeconomic aggregates (output, consumption, and investment) in a 60-country sample covering seven regions of the world. The results indicate that a common world factor is an important source of volatility for aggregates in most countries, providing evidence for a world business cycle. We find that region-specific factors play only a minor role in explaining fluctuations in economic activity. We also document similarities and differences across regions, countries, and aggregates. (JEL F41, E32, C11, C32)
Kose, M. Ayhan, Christopher Otrok and Charles H. Whiteman.
2003."International Business Cycles: World, Region, and Country-Specific Factors."American Economic Review,
93(4): 1216-1239.DOI: 10.1257/000282803769206278