1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Ongoing Changes in the Business Cycle

Evidence and Causes

This paper first reviews a number of stylised facts concerning OECD country business cycles over the past four decades. In general, the amplitude of business cycles has fallen, driven mainly by declining fluctuations of domestic demand. As a result, international divergencies of cyclical positions have diminished but, outside the euro area, there is little evidence of increased synchronisation of cycles. The paper then reviews a number of influences on business cycles. The evidence suggests that, on balance, features of macroeconomic policies may have tended to reduce cyclical volatility and structural changes, notably the increased share of the service sector in the economies, have also tended to dampen the cycle. More recently, there are signs that financial market prices have increasingly moved in sympathy across countries, and the final section of the paper illustrates how this could affect the international transmission of cyclical shocks and the associated need for policy ...

English

Keywords: macroeconomic policies, business cycles, international linkages
JEL: E44: Macroeconomics and Monetary Economics / Money and Interest Rates / Financial Markets and the Macroeconomy; E30: Macroeconomics and Monetary Economics / Prices, Business Fluctuations, and Cycles / Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data); E63: Macroeconomics and Monetary Economics / Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook / Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy; F41: International Economics / Macroeconomic Aspects of International Trade and Finance / Open Economy Macroeconomics; E32: Macroeconomics and Monetary Economics / Prices, Business Fluctuations, and Cycles / Business Fluctuations; Cycles
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