One Ring to Rule Them All? New Evidence on World Cycles

Author/Editor:

Eric Monnet ; Damien Puy

Publication Date:

September 20, 2019

Electronic Access:

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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.

Summary:

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.

Series:

Working Paper No. 19/202

Subject:

English

Publication Date:

September 20, 2019

ISBN/ISSN:

9781513512969/1018-5941

Stock No:

WPIEA2019202

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

36

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