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Business Cycle Spatial Synchronization: Measuring a Synchronization Parameter

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  • Shinya Fukui

    (Graduate School of Economics, Kobe University / Senior Researcher, Osaka Prefectural Government, Japan)

Abstract

With decreasing comprehensive transportation costs, business cycle synchronization seems to be increasing. In such circumstances, we estimate business cycle synchronization of the Asia-Pacific region and European region. We apply the spatial generalized autoregressive score (Spatial GAS) method to measure the time-varying business cycle synchronization. Estimated business cycle synchronization parameters show positive high values in periods of economic turmoil, such as the collapse of the Lehman Brothers in 2008 by which high volatility is accompanied. With the recent increase in economic integration, exogenous shocks increased geographically and economically closer countries’ business cycle synchronization to each other, and such shocks cause economic instability.

Suggested Citation

  • Shinya Fukui, 2020. "Business Cycle Spatial Synchronization: Measuring a Synchronization Parameter," Discussion Papers 2009, Graduate School of Economics, Kobe University.
    • Handle: RePEc:koe:wpaper:2009
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    File URL: http://www.econ.kobe-u.ac.jp/RePEc/koe/wpaper/2020/2009.pdf
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