Economic Cycles in Emerging and Advanced Countries: Synchronization, International Spillovers and the Decoupling Hypothesis

189 Pages·2015·3.442 MB·English

by  Antonio Pesce (auth.)

Contributions to Economics
Antonio Pesce
Economic Cycles
in Emerging
and Advanced
Countries
Synchronization, International Spillovers
and the Decoupling Hypothesis
Contributions to Economics
More information about this series at
http://www.springer.com/series/1262
Antonio Pesce
Economic Cycles in
Emerging and Advanced
Countries
Synchronization, International Spillovers
and the Decoupling Hypothesis
AntonioPesce
Milan,Italy
ISSN1431-1933 ISSN2197-7178 (electronic)
ContributionstoEconomics
ISBN978-3-319-17084-8 ISBN978-3-319-17085-5 (eBook)
DOI10.1007/978-3-319-17085-5
LibraryofCongressControlNumber:2015938465
SpringerChamHeidelbergNewYorkDordrechtLondon
©SpringerInternationalPublishingSwitzerland2015
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To my parents and
Precious Ann
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Preface
Thismonographemergedfrom4yearsofdoctoralstudiesattheCatholicUniver-
sityofMilan.ManypeoplehavehelpedmeinvariouswayswhileIwasworkingon
the thesis. Greatest thanks are due to Laura Barbieri, my supervisor, for her
comments,helpfuladvice,guidance,andcontinuoussupport.Iamalsogratefulto
commentsanddiscussionsofseminar’sparticipantsandprofessorsattheCatholic
UniversityofMilan(IT),inparticularGianlucaFemminis,DomenicoDelliGatti,
Marco Lossani, Maurizio Motolese, and Lorenzo Cappellari. I would also like to
thank professors at International Center of Econometrics (CIdE), summer school
“BayesianMethodsinEconomicsandFinance”Bertinoro(IT),2012.Ialsogreatly
benefited from comments and discussions of participants at Ph.D. Conference
“International Development 2013”, University of East Anglia, Norwich (UK),
and participants at 53rd Congress of European Regional Science Association
(ERSA)attheUniversityofPalermo(IT).
On a personal level, I owe gratitude to my relatives and a very special person,
PreciousAnn,fortheirsteadyandkindencouragement.
Milan,Italy AntonioPesce
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About the Book
This book, by using a new empirical investigation approach, contributes to the
debate on “decoupling of Emerging Economies (EEs) from the Advanced Econo-
mies (AEs)” by addressing the following main questions: “Has the EEs’ vulnera-
bility to external shocks (both real and credit shocks) coming from AEs changed
overtime?Ifso,hasitgrownordecreased,asthedecouplinghypothesisclaims?”
Up until now, decoupling theory has been empirically investigated by looking
for some kind of structural break in the model’s coefficients identifiable at some
point in the time (usually in the late 1980s). Such an approach is appropriate and
effective if the object of study evolves discretely over time, namely as a break at
certainpointoftime.However,ifagradualevolutionovertimeisplausible,asmay
wellbetrueinthecaseofdecoupling,thenitwouldbemoreappropriatetoutilize
anapproach(asinthiswork)allowingforagradualchangeincoefficientsovertime
ratherthanforanabruptbreak.
Through counterfactual experiments performed using a Time Varying Panel
VARmodel,thebookshowsthatoverthelast30yearstheEEshavebecomeless
vulnerable to shocks spreading from the AEs. However, the EEs’ resilience to
externalshockshaschangedinanonprogressivemannerovertimewithphasesof
greaterresiliencefollowedbyothersoflowerresilienceandviceversa;thisoutlines
a“wavelike”path,anewevidencewhichhadnotyetbeenanalyzedintheeconomic
literature.
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