The Survey on the Synchronized Business Cycles  of the OPEC Member Countries

Shayegani, Bita; Afshari, Zahra; Bidabad, Bijan

Document Type : Research Paper

Authors

Abstract

The present article assesses the existence of synchronization among the OPEC members’ business cycles. For the purposes of assessing system of simultaneous equations a "central model” due to Helbling and Brodo in the study of synchronization of business cycles, have been used. This way Synchronization between business cycles of OPEC member countries by means of synchronization between their business cycles with core country (that in this study for key role of this country in OPEC as the largest oil producer and exporter, is Saudi Arabia) is assessed. By making use of measure of residuals (which are representation of non-synchronization) and classifying of the countries into homogenous groups by using taxonomy method, synchronization between business cycles of OPEC member countries were assessed. For being accurate on the subject, results have been controlled by stepwise regressions method with consideration of trade variable. For filtering effect of quality transitions of two countries, Kuwait and Indonesia in 1990 and 1998, these tests are
accomplished without/with dummy variables. Results indicated strong synchronization between the OPEC members’ business cycles. Therefore due to effect of external dummy variables, this article concludes that their business cycles are synchronous, if OPEC member countries can protect them against external shocks and the precondition of common economic coordination (i. e., synchronization of business cycles) between them will be accomplished.

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Economics Research

The Survey on the Synchronized Business Cycles of the OPEC Member Countries

References

References

Volume 8, Issue 29 - Serial Number 2
July 2008
Pages 153-180

The Survey on the Synchronized Business Cycles of the OPEC Member Countries

References

References

Volume 8, Issue 29 - Serial Number 2July 2008Pages 153-180

Volume 8, Issue 29 - Serial Number 2
July 2008
Pages 153-180