Sources and Propagation of International Cycles: Common Shocks or Transmission?

Posted: 10 Mar 1997

See all articles by Jane Marrinan

Jane Marrinan

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Fabio Canova

BI Norwegian Business School

Date Written: November 1996

Abstract

This paper studies the generation and transmission of international cycles in a multi-country model with production and consumption interdependencies. Two sources of disturbance are considered, and three channels of propagation are compared. In the short run the contemporaneous correlation of disturbances determines the main features of the transmission. In the medium run production interdependencies account for the transmission of government shocks. Technology disturbances, which are mildly correlated across countries, are more successful than government expenditure disturbances in reproducing actual data. The model also accounts for the low cross-country consumption correlations observed in the data.

JEL Classification: C68, E32, F11

Suggested Citation

Marrinan (deceased), Jane and Canova, Fabio, Sources and Propagation of International Cycles: Common Shocks or Transmission? (November 1996). Available at SSRN: https://ssrn.com/abstract=3785

Jane Marrinan (deceased)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Fabio Canova (Contact Author)

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

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