Evaluation of Business Cycle Synchronization by the Oil Revenues (Markov Switching Bayesian VAR Analysis)
AbstractThe synchronization of business cycles is one of the new topics that have been raised in recent decades in the field of international business at the same time of increased economic integration between countries. Accordingly, considering the influenced Iranian economy by the flow of business cycles, and given that synchronization is investigated by the existence of common factors, so in this study, the synchronization of business cycles of a country as OPEC member with the important and influential factors of oil, which have a significant effect on both the economy of the country and the world, has been studied. Due to the formation of business cycles and the process of oil revenue, the method used is Markov Bayesian VAR Switching (MSBVAR) analysis. According to the obtained results, the synchronization of business cycles between Iran and Iraq during 1985-2015 indicates the high synchronization and symmetry between the two countries' business cycles. The role of oil revenues is significant in justifying the degree of synchronization of business cycles. Regimen 1 (Stagnation) has been more stable than Regime 2 (Inflation) and Regime 1is more likely to be dominant.
Bayoumi, T. & B. Eichengreen (1997), "Ever Closer to Heaven? An Optimum Currency Area Index for European Countries", European Economic Review, Vol. 41, PP. 761-770.
Burns, A. & W. Mitchell (1946),"Measuring Business Cycles", NBER Paper, NY, P. 3.
Calderon,c. chong. A. &STEIN, E (2003), trade intensity and business cycle synchronization: are developing countries any different? Inter American development bank working paper 478.
Frankel, J. A., & Rose, A. K. (1998),"The Endogeneity of the Optimum Currency Are Criteria". The Economic Journal, No. 108: 1009-1025.
Harding, D. & Pagan, A. (2002),"Dissecting the Cycle", A Methodological Investigation, Journal of Monetary Economics, No.49, pp. 365-321.
Hsu, C. C., Wu, J. Y., & Yau, R. (2011). Foreign direct investment and business cycle comovements.
Jahadi, M. and Elmi, Z.M. (2011), “Oil Price Shocks and Economic Growth Evidence from OPEC”, Quarterly Journal of Economic Growth and Development, 1(2), pp. 11-40.
Koop, Gary. (2009).” Analysis of Economic Data”, Third Edition, Wiley, PP: 166-78.
Margaux MacDonal (2016).” International Capital Market Frictions and Spillovers from Quantitative Easing”, Queen’s Economics Department Working Paper No. 1346
McKinnon, Ronald (1973), "Money and Capital in Economic Development", Washington: Brookings Inst.
Monica Billio, Roberto Casarin, Herman K. van Dijk, Gian Luigi Mazzi, G, Ravazzolo, F,(2011)."Turning point detection with Bayesian panel Marcove-Switching VAR". Statistical working papers Eurostat.
Shin, K. & Y. Wang (2004), "Trade Integration and Business Cycle Synchronization in East Asia", Paper Provided by East Asian Bureau of Economic Research in
The Author(s) must make formal transfer of copyright for each article prior to publication in the International Journal of Contemporary Economics and Administrative Sciences. Such transfer enables the Journal to defend itself against plagiarism and other forms of copyright infringement. Your cooperation is appreciated. You agree that copyright of your article to be published in the International Journal of Contemporary Economics and Administrative Sciences is hereby transferred, throughout the World and for the full term and all extensions and renewals thereof, to International Journal of Contemporary Economics and Administrative Sciences.
The Author(s) reserve(s): (a) the trademark rights and patent rights, if any, and (b) the right to use all or part of the information contained in this article in future, non-commercial works of the Author's own, or, if the article is a "work-for-hire" and made within the scope of the Author's employment, the employer may use all or part of the information contained in this article for intra-company use, provided the usual acknowledgements are given regarding copyright notice and reference to the original publication.
The Author(s) warrant(s) that the article is Author's original work, and has not been published before. If excerpts from copyrighted works are included, the Author will obtain written permission from the copyright owners and shall credit the sources in the article. The author also warrants that the article contains no libelous or unlawful statements, and does not infringe on the rights of others. If the article was prepared jointly with other Author(s), the Author agrees to inform the co-Author(s) of the terms of the copyright transfer and to sign on their behalf; or in the case of a "work-for-hire" the employer or an authorized representative of the employer.
The journal is registered with the ISSN : 1925-4423.
IJCEAS is licensed under a Creative Commons Attribution 4.0 International License.
This license lets others distribute, remix, tweak, and build upon your work, even commercially, as long as they credit you for the original creation. This is the most accommodating of licenses offered. Recommended for maximum dissemination and use of licensed materials.