Cover IMF Working Papers
Buy Book in Print
Has Globalization Really Increased Business Cycle Synchronization?
Author:
Eric Monnet null

Search for other papers by Eric Monnet in
Current site
Google Scholar Close
and
Mr. Damien Puy null

Search for other papers by Mr. Damien Puy in
Current site
Google Scholar Close
Series:
IMF Working Papers
Volume/Issue:
Volume 2016: Issue 054
Language:
English
Publication Date:
08 Mar 2016
DOI:
https://doi.org/10.5089/9781513564890.001
ISBN:
9781513564890
ISSN:
1018-5941
Pages:
55
Keywords:
WP; post-war period; International Business Cycles; Synchronization; Financial integration; Trade integration; Globalization; globalization period; Bretton Woods period; world business cycle; business cycle synchronization; movement pattern; Business cycles; Exchange rate arrangements; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (3.1 MB) Download Epub
This paper assesses the strength of business cycle synchronization between 1950 and 2014 in a sample of 21 countries using a new quarterly dataset based on IMF archival data. Contrary to the common wisdom, we find that the globalization period is not associated with more output synchronization at the global level. The world business cycle was as strong during Bretton Woods (1950-1971) than during the Globalization period (1984-2006). Although globalization did not affect the average level of co-movement, trade and financial integration strongly affect the way countries co-move with the rest of the world. We find that financial integration de-synchronizes national outputs from the world cycle, although the magnitude of this effect depends crucially on the type of shocks hitting the world economy. This de-synchronizing effect has offset the synchronizing impact of other forces, such as increased trade integration.
  • Collapse
  • Expand
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund