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The Spectral Envelope: An Application to the Decoupling Problem in Economics

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  • Dilip M. Nachane

    (Indira Gandhi Institute of Development Research (IGIDR))

  • Amlendu Dubey

    (Indian Institute of Technology Delhi)

Abstract

In this paper we introduce the technique of spectral envelope into the analysis of the decoupling problem among economies. Decoupling refers to the phenomenon that the business cycles in emerging market economies are de-synchronized from cyclical movements in the advanced economies. The analysis shows that all the countries considered in the sample have a common cycle of approximately 42 months. The results point to a strong possibility of a common global cycle of a periodicity between 3 and 4 years.

Suggested Citation

  • Dilip M. Nachane & Amlendu Dubey, 2021. "The Spectral Envelope: An Application to the Decoupling Problem in Economics," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 19(1), pages 287-308, December.
    • Handle: RePEc:spr:jqecon:v:19:y:2021:i:1:d:10.1007_s40953-021-00272-w
    DOI: 10.1007/s40953-021-00272-w
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    More about this item

    Keywords

    Spectral envelope; Frequency domain; Dynamic factor analysis; Wavelets; Decoupling; Business cycles;
    All these keywords.

    JEL classification:

    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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