alfa uni 2011-12 low7.2 - Buskerud Brannservice

1. IntroductionThis paper examines international business cycle amongst major industrializedeconomies in terms of coherence and phases in the frequency domain. It analyzes thecross spectra of output of these economies in different cycle components or at differentfrequencies. In particular, it focuses on the patterns of co-movement in terms ofcoherence, coincidence and phase leads/lags. This is in contrast with lead/lag relationsand correlations in the time domain and, therefore, offers another means of looking atinternational business cycle issues. Intuitively, the approach is to inspect the degree towhich one output variable differs from another in time series behavior in the frequencydomain. It examines the similarities and synchronous relations in the spectra of timeseries. Characteristically, as spectrum and cross spectrum components are depictedagainst frequencies of time series, spectral analysis is particularly helpful in the studyof cyclical co-movements, such as international business cycles. Therefore, theapproach in the frequency domain may present a fuller picture of internationalbusiness cycle fluctuations with the same (amount of) information available to us in thetime domain, which is utilized in a way more appropriately and effectively for thistype of investigation.Research on international business cycles is not as extensive as that on businesscycles in closed economies. Many empirical studies are more about internationalcomparisons of business cycle features in individual countries than internationalbusiness cycle linkages and co-movements between national economies; and the co-2