02416cas a2200265 a 4500 AALejournalIMF005024 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451870015 1018-5941 BD-DhAAL BD-DhAAL Kose, Ayhan. Global Business Cycles : Convergence or Decoupling? / Ayhan Kose, Eswar Prasad, Christopher Otrok. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (49 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper analyzes the evolution of the degree of global cyclical interdependence over the period 1960-2005. We categorize the 106 countries in our sample into three groups-industrial countries, emerging markets, and other developing economies. Using a dynamic factor model, we then decompose macroeconomic fluctuations in key macroeconomic aggregates-output, consumption, and investment-into different factors. These are: (i) a global factor, which picks up fluctuations that are common across all variables and countries; (ii) three group-specific factors, which capture fluctuations that are common to all variables and all countries within each group of countries; (iii) country factors, which are common across all aggregates in a given country; and (iv) idiosyncratic factors specific to each time series. Our main result is that, during the period of globalization (1985-2005), there has been some convergence of business cycle fluctuations among the group of industrial economies and among the group of emerging market economies. Surprisingly, there has been a concomitant decline in the relative importance of the global factor. In other words, there is evidence of business cycle convergence within each of these two groups of countries but divergence (or decoupling) between them. Mode of access: Internet Otrok, Christopher. Prasad, Eswar. IMF Working Papers; Working Paper ; No. 2008/143 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/143/001.2008.issue-143-en.xml IMF e-Library