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One Ring to Rule Them All? New Evidence on World Cycles
Author:
Eric Monnet null

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Mr. Damien Puy null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2019: Issue 202
Language:
English
Publication Date:
20 Sep 2019
DOI:
https://doi.org/10.5089/9781513512969.001
ISBN:
9781513512969
ISSN:
1018-5941
Pages:
36
Keywords:
WP; yield; equity price; World Cycles; Business Cycles; Financial Cycles; Financial integration; Trade integration; Globalization; US Monetary Policy; credit statistics; world credit cycle; credit synchronization; synchronization measure; credit series; GFC period; bind yield EM sample; credit data; world output; y-o-y credit growth; EM sample; Asset prices; Credit; Bond yields; Global financial crisis of 2008-2009; Global
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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.
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We estimate world cycles using a new quarterly dataset of output, credit and asset prices assembled using IMF archives and covering a large set of advanced and emerging economies since 1950. World cycles, both real and financial, exist and are generally driven by US shocks. But their impact is modest for most countries. The global financial cycle is also much weaker when looking at credit rather than asset prices. We also challenge the view that syncronization has increased over time. Although this is true for prices (goods and assets), this not true for quantities (output and credit). The world business and credit cycles were as strong during Bretton Woods (1950–1972) as during the Globalization period (1984-2006). For most countries, the way their output co-moves with the rest of the world has changed little over the last 70 years. We discuss the reasons behind these new findings and their policy implications for small open economies.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund