Historical evidence on business cycles: the international experience

This paper examines the characteristics of business cycles within and across thirteen countries for more than a century of observations adopting a monetary regime perspective. We search for empirical regularities of business cycle fluctuations during three monetary regimes; the classical gold standard, the interwar period and the post-World War II period. Our empirical results, based on bandpass filtered data, suggest that business cycle fluctuations have remained surprisingly stable across monetary regimes and across countries. In particular, the procyclical pattern for consumption, investment, exports and imports is stable across regimes and countries. We find a rise in the frequency of significant cyclical comovements across countries, possibly reflecting a recent rise in economic integration. Our evidence suggests that both the amplitude and the symmetry of business cycles have changed over time. The post-World War II period is marginally less volatile than the gold standard period while the interwar period is more volatile.