IMF Research Perspective (formerly published as IMF Research Bulletin) is a new, redesigned online newsletter covering updates on IMF research. In the inaugural issue of the newsletter, Hites Ahir interviews Valeria Cerra; and they discuss the economic environment 10 years after the global financial crisis. Research Summaries cover the rise of populism; economic reform; labor and technology; big data; and the relationship between happiness and productivity. Sweta C. Saxena was the guest editor for this inaugural issue.
Macroeconomic analysis in Lebanon presents a distinct challenge. For example, long
delays in the publication of GDP data mean that our analysis often relies on proxy
variables, and resembles an extended version of the “nowcasting” challenge familiar to
many central banks. Addressing this problem—and mindful of the pitfalls of extracting
information from a large number of correlated proxies—we explore some recent
techniques from the machine learning literature. We focus on two popular techniques
(Elastic Net regression and Random Forests) and provide an estimation procedure that is
intuitively familiar and well suited to the challenging features of Lebanon’s data.
This paper investigates the empirical characteristics of business cycles and the extent of cyclical comovement in the Gulf Cooperation Council (GCC) countries, using various measures of synchronization for non-hydrocarbon GDP and constituents of aggregate demand during the period 1990-2010. By applying the Christiano-Fitzgerald asymmetric band-pass filter and a mean corrected concordance index, the paper identifies the degree of non-hydrocarbon business cycle synchronization?one of the main prerequisites for countries considering to establish a monetary union. The empirical results show low and heterogeneous synchronization in non-hydrocarbon business cycles across the GCC economies, and a decline in the degree of synchronicity in the 2000s, if Kuwait is excluded from the sample, partly because of divergent fiscal policies.