UCL Discovery
UCL home » Library Services » Electronic resources » UCL Discovery

The International Synchronisation of Business Cycles: the Role of Animal Spirits

De Grauwe, P; Ji, Y; (2017) The International Synchronisation of Business Cycles: the Role of Animal Spirits. Open Economies Review , 28 (3) pp. 383-412. 10.1007/s11079-017-9434-3. Green open access

[img]
Preview
Text
Ji_10.1007%2Fs11079-017-9434-3.pdf - Published version

Download (1MB) | Preview

Abstract

Business cycles among industrial countries are highly correlated. We develop a two-country behavioral macroeconomic model where the synchronization of the business cycle is produced endogenously. The main channel of synchronization occurs through a propagation of “animal spirits”, i.e. waves of optimism and pessimism that become correlated internationally. We find that this propagation occurs with relatively low levels of trade integration. We do not need a correlation of exogenous shocks to generate synchronization. We also empirically test the main predictions of the model.

Type: Article
Title: The International Synchronisation of Business Cycles: the Role of Animal Spirits
Open access status: An open access version is available from UCL Discovery
DOI: 10.1007/s11079-017-9434-3
Publisher version: http://doi.org/10.1007/s11079-017-9434-3
Language: English
Additional information: © The Author(s) 2017. This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.
Keywords: Animal spirits; Behavioral macroeconomics; Business cycles
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > SSEES
URI: https://discovery.ucl.ac.uk/id/eprint/1559377
Downloads since deposit
34Downloads
Download activity - last month
Download activity - last 12 months
Downloads by country - last 12 months

Archive Staff Only

View Item View Item