Does the United States Lead Foreign Business Cycles?
26 Pages Posted: 19 Aug 2015 Last revised: 24 Jul 2019
Date Written: 2015
The U.S. financial crisis of 2007-08 had detrimental and lasting effects on the economies of other nations, reinforcing the leading role played by the United States in the global economy. The authors assess this role by determining whether U.S. output growth informs business cycle turning points in the economies of other nations. They find that U.S. economic growth influences both the timing and duration of business cycle phases for Canada, Germany, the United Kingdom, and, to a lesser extent, Mexico. However, they find no relationship between U.S. output growth and the business cycles of France, Italy, and Japan.
JEL Classification: E32, F44
Suggested Citation: Suggested Citation