Mode-Locking and Regional Business Cycle Synchronization*

Selover, David D.; Jensen, Roderick V.; Kroll, John H.

doi:10.1111/j.0022-4146.2005.00390.x

Cited by 12 publications

(7 citation statements)

References 41 publications

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“…Moreover, different responses of the regions to common shocks, such as unanticipated changes in interest rates, commodity prices and productivity shocks might contribute to the process of cyclical divergence (Carlino & DeFina ; Imbs ; Selover et al . ).…”

Section: Introductionmentioning

confidence: 97%

Convergence of Regional Economic Cycles in Turkey

Duran

2013

Rev Urban & Reg Develop

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TurkeyDissimilar economic fluctuations and asymmetric shocks across the regions of a country might create severe policy distortions that, under these circumstances, aggregate policy interventions (such as taxation and interest rates), are likely to be sub-optimal for at least a fraction of the regions. For instance, monetary policy can hardly satisfy the needs of all regions when some of the regions are experiencing a boom while others are in a recession phase. For these reasons, similarity of regional business cycles and their convergence are highly desirable from a policy viewpoint. The aim of this paper is, therefore, to provide empirical evidence and policy implications in that context. In particular, I analyze business cycle correlations across Turkish provinces and the tendency of these cycles to converge over the period of analysis between 1975-2000 and 2004-2008 (for Nomenclature of Territorial Units for Statistics [NUTS]-2 regions). I find that regional business cycle asymmetries have tended to decrease in recent decades. This result, although it seems to provide evidence in favor of rising correlations, shows that the convergence process is rather slow and there still exist asymmetries across the regional business cycles.

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Section: Introductionmentioning

confidence: 97%

Convergence of Regional Economic Cycles in Turkey

Duran

2013

Rev Urban & Reg Develop

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“…It will represent the deterministic component of fluctuations in a stock market. The use of this example comes from Selover, Jensen, and Kroll (2005).…”

Section: The Modelmentioning

confidence: 99%

“…A numerical simulation from Selover et al (2003Selover et al ( , 2005 illustrates how the mode-locking phenomenon works, even under conditions of noise like those seen in financial markets. The coupled van der Pol oscillator system in equations 3 and 4 is easy to simulate numerically.…”

Section: Simulationsmentioning

confidence: 99%

Why Can Weak Linkages Cause International Stock Market Synchronization? The Mode-Locking Effect

Filer¹,

Selover

2014

International Journal of Financial Research

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This study investigates the synchronization between stock markets in different countries. International stock markets tend to synchronize with one another in what appears to be an international financial cycle, yet trade and capital flows between the stock markets do not appear to be strong enough for one stock market to "drive" fluctuations in another stock market. Why are these weakly linked financial markets synchronized? This study suggests that global stock market synchronization results from a "mode-locking" phenomenon, a nonlinear process in which even a weak coupling between oscillating systems like stock markets tends to synchronize the fluctuations between the systems. Simulations, econometric analysis, and spectral analysis investigate this mode-locking hypothesis. Analysis reveals modest support for the mode-locking hypothesis of international stock market synchronization.

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“…8 Because the MS-AR model could not identify significant regime-switching behaviour in the East Region, Pearson's contingency coefficient was employed only in North, Central and South Regions. 9 Selover et al (2005) investigated the reasons behind this synchronisation of business cycles. They argued that trade between regions may not be strong enough for one region to "drive" the business cycle fluctuations in another region.…”

Section: The Patterns Of Individual Regional Business Cyclementioning

confidence: 99%

“…1 Studies on regional business cycles developed in the 1920s and were pioneered by McLaughlin (1930), Vining (1945Vining ( , 1946aVining ( , 1946bVining ( , 1949 and Isard (1949). In the last decade, many studies on the dynamics of the business cycle in different regions or countries have been conducted (Still, 1997;Clark and Eric, 1999;Rissman, 1999;Carlino and DeFina, 2004;Selover et al, 2005;Owyang et al, 2005Owyang et al, , 2009Hall and McDermott, 2007;Kabundi andLoots, 2007, 2010;Norman and Walker, 2007;Kabundi, 2009).…”

Section: Introductionmentioning

confidence: 99%

Regional Business Cycle Phases in Taiwan

Liu

2011

South African J Economics

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This paper uses both univariate and multivariate Markov‐switching models to explore the characteristics of the regional business cycle phases in Taiwan. In particular, this paper provides novel evidence regarding the “turning‐point identification” puzzle in Taiwan that to date has not been fully resolved. We find that the regime‐switching behaviour of the common regional business cycle is consistent (or even precedes recession) with the business cycle expansion and contraction indicators used by the Council for Economic Planning and Development. This finding suggests that the common regional business cycle identifies the turning point after the 1990s. This finding also suggests that the employment growth index would be a great indicator for monitoring the business cycle in Taiwan.

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Mode-Locking and Regional Business Cycle Synchronization*

Cited by 12 publications

References 41 publications

Convergence of Regional Economic Cycles in Turkey

Convergence of Regional Economic Cycles in Turkey

Why Can Weak Linkages Cause International Stock Market Synchronization? The Mode-Locking Effect

Regional Business Cycle Phases in Taiwan

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