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Economic Cycle Volatility in the World Economy and Prospects for Global Economic Equilibrium Recovery

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  • Vadym Konchyn

Abstract

The article examines the problems of cyclical economic development in the world economy. The trends in economic development and the degree of economic cycle volatility in the world during the 1970-2010 are analyzed. The phenomenon of the Great Moderation as a period of achieving the long-term relative equilibrium in the global economy on methodological and empirical level is represented. On the basis of correlation and regression modeling the trends of real GDP and changes in consumer prices for economies are identified, on which nowadays predominantly the restoration of economic equilibrium depends in view of maintaining the existing global economic order. Scenarios of restoring the global economic equilibrium within the neoclassical and neokeynesian vision are outlined and alternative modern concepts of global economy transformation in the context of attempts to solve the problem of worsening cyclical economic development and economic instability are presented.

Suggested Citation

  • Vadym Konchyn, 2011. "Economic Cycle Volatility in the World Economy and Prospects for Global Economic Equilibrium Recovery," Journal of Global Economy, Research Centre for Social Sciences,Mumbai, India, vol. 7(4), pages 226-248, December.
    • Handle: RePEc:jge:journl:741
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    References listed on IDEAS

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    1. Richard Clarida & Jordi Galí & Mark Gertler, 2000. "Monetary Policy Rules and Macroeconomic Stability: Evidence and Some Theory," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(1), pages 147-180.
    2. James H. Stock & Mark W. Watson, 2003. "Has the Business Cycle Changed and Why?," NBER Chapters, in: NBER Macroeconomics Annual 2002, Volume 17, pages 159-230, National Bureau of Economic Research, Inc.
    3. Dynan, Karen E. & Elmendorf, Douglas W. & Sichel, Daniel E., 2006. "Can financial innovation help to explain the reduced volatility of economic activity?," Journal of Monetary Economics, Elsevier, vol. 53(1), pages 123-150, January.
    4. Jean Boivin & Marc P. Giannoni, 2006. "Has Monetary Policy Become More Effective?," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 445-462, August.
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    More about this item

    Keywords

    economic cycle volatility; Great Moderation; global economic equilibrium; inflationary and deflationary scenarios in global economy; steady-state economy; and technological singularity;
    All these keywords.

    JEL classification:

    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • F01 - International Economics - - General - - - Global Outlook
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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