The world economy has become more closely integrated in recent
years due to increasing trade and financial flows across countries.
This has spurred interest in the question of how the ongoing
phenomenon of globalization has affected the transmission and
propagation of business cycle fluctuations across national borders.
An important question in this context is whether a substantial
fraction of economic fluctuations are country-specific or if there
exists a world business cycle, which might be defined as
fluctuations that are common for all countries. More generally, the
comovement of macroeconomic aggregates across different countries
has become a topic of increasing interest in both academic and
International Monetary Fund
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