Business Cycles synchronicity and income levels: has globalization brought us closer than ever? Rosmy Jean Louis* Daniel Simons Abstract



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Table 5 Reference Cycles Across Pools of Countries with Synchronized cycles




Criteria and Selection

Minimum GAP




Maximum Average & Maximum Median Growth Rate With Bhutan




References

Output Gap




References

Output Gap







Australia

0.002




Ireland

0.004







Andorra

0.007




Virgin island

0.030







South Africa

0.005




Equatorial Guinea

0.081







Sri Lanka

0.002




China

0.006







Pakistan

0.002




Bhutan

0.016

























Minimin




0.002







0.004



Selection




Pakistan

X




Ireland



AD HOC Minimum Reference




Australia






N/A

..

Global Reference




France






Ireland



AD HOC Reference




USA






USA



























Median Average Gap




Maximum Average & Maximum Median Growth Rate With Vietnam




References

Output Gap




References

Output Gap







UK

0.004




Ireland

0.004







Liechtenstein

0.025




Virgin Island

0.030







Poland

0.021




Equatorial Guinea

0.081







Paraguay

0.007




China

0.006







Equatorial Guinea

0.003




Vietnam

0.008

























Minimin




0.003







0.004




Selection




Equatorial Guinea

x




Ireland



AD HOC Minimum Reference




United Kingdom






N/A

..

Global Reference




France






Monaco



AD HOC Reference




USA






USA



We have 5 possible groupings of the countries with cycles associated with one or more countries for the World. The grouping based on the Median is left out in this table because no country in that pool can be portrayed as a reference because the Median is considered as a fictitious country. The Minimum Gap pool for example contains all countries that were selected by the minimum average gap criterion with SR above 0.50 irrespective of the income group. Minimin is the minimum of all minimum average output gap for the reference countries within each pool. Once this minimum is found the country associated is considered under Selection, and a decision is made as to whether it is plausible to use this country as one of the references for the pool. If the country is a less-developed country it defies common sense to use it as a reference cycle when there is a large country in the group. A check mark is used if the answer is yes and a cross is used otherwise. If we have to reject the country selected by the Minimin as a potential reference cycle, we take the large country in the group of 5 previous references the bivariate set up within that specific pool as the AD HOC Minimum Reference. The Global Reference cycle is the country with the minimum average output gap in the big pool. USA is of course used an ad hoc reference since it is the largest economy of the world.

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