If the United States sneezes, does the world need "pain-killers"?

M. J. Herrerias, J Ordóñez

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

In this paper we analyze the extent to which the US economy affects international business fluctuations across countries and we ask whether the nonlinear nature of the business cycle affects the degree of co-movement between countries. A multivariate nonlinear LSTAR model is estimated for the GDP cyclical components of China, France, Germany, the UK and the US. This nonlinear framework allows the asymmetries of the business cycle to be captured properly to identify the synchronization behavior across countries. Our results suggest that there is a relevant influence of the US cycle, specifically during recessions.
Original languageEnglish
Pages (from-to)159-170
Number of pages12
JournalInternational Review of Economics and Finance
Volume31
DOIs
Publication statusPublished - 1 May 2014

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