Testing for Common Cycles in Money, Nominal Income and Prices

In the first section the authors discuss the nature of cyclical features and the distinction between the traditional analysis of co-movement discussed in the business cycles literature and the more recent common cycles analysis. Section 2 examines the nature of the data used in the estimation procedures and the degree to which the relevant series exhibit stationary and non-staionary features. Section 3 applies correlation methods and the common features test procedure to assess whether common or codependent cyclical patterns can be identified for the relationships considered. The final section provides a summary and brief discussion of the results.