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The Spectral envelope: An Application to the decoupling problem in economics

Author

Listed:
  • Dilip M. Nachane

    (Indira Gandhi Institute of Development Research)

  • Amlendu Dubey

    (Indian Institute of Technology, Delhi)

Abstract

In this paper we introduce the technique of spectral envelope into the analysis of decoupling problem in Economics. 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 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 to 4 years.

Suggested Citation

  • Dilip M. Nachane & Amlendu Dubey, 2019. "The Spectral envelope: An Application to the decoupling problem in economics," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2019-022, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2019-022
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    References listed on IDEAS

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    3. Antonio Pesce, 2017. "The Decoupling Of Emerging Economies: Theoretical And Empirical Puzzle," Journal of Economic Surveys, Wiley Blackwell, vol. 31(2), pages 602-631, April.
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    6. Jarko Fidrmuc & Iikka Korhonen & Ivana Bátorová, 2013. "China in the World Economy: Dynamic Correlation Analysis of Business Cycles," CESifo Economic Studies, CESifo Group, vol. 59(2), pages 392-411, June.
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    8. Dilip Nachane & Amlendu Dubey, 2018. "India in the globalized economy : Growth spillovers & business cycle synchronization," International Economics and Economic Policy, Springer, vol. 15(1), pages 89-115, January.
    9. Dilip Nachane & Amlendu Kumar Dubey, 2013. "Trend and cyclical decoupling: new estimates based on spectral causality tests and wavelet correlations," Applied Economics, Taylor & Francis Journals, vol. 45(31), pages 4419-4428, November.
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    Cited by:

    1. Martin Mandler & Michael Scharnagl, 2022. "Financial Cycles in Euro Area Economies: A Cross‐Country Perspective Using Wavelet Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(3), pages 569-593, June.

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    More about this item

    Keywords

    Spectral envelope; Frequency domain; 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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