Trend and cyclical decoupling: new estimates based on spectral causality tests and wavelet correlations

Nachane, Dilip M.; Dubey, Amlendu Kumar

doi:10.1080/00036846.2013.788781

Cited by 15 publications

(7 citation statements)

References 21 publications

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“…According to the empirical analysis for that sample period based on the ARDL bounds testing approach, GDP, export, and import indicators of the United States have no long-term relationship with China's and India's GDP. This evidence is consistent with other decoupling finds (Akın and Kose 2007;Park and Shin 2009;Fidrmuc and Korhonen 2010;Kose, Otrok, and Prasad 2012;Nachane and Dubey 2013). This finding can be described by the internal demand-driven economy and intraregional trade economy of Asian countries.…”

Section: Resultssupporting

confidence: 92%

“…Influential growth rates of EMEs, especially China and India, seem not to be affected by industrial countries' weak growth performances. These growth evidence of EMEs and industrial countries lead to decoupling conditions, which means tight linkages of business cycles between EMEs and industrial countries (Kose, Otrok, and Prasad 2012;Nachane and Dubey 2013). Kose, Otrok, and Prasad (2012) asserted that industrial countries converge in the scope of business cycle with each other; on the contrary, emerging economies' business cycle converge with each other as well.…”

Section: Theoretical Perspectivementioning

confidence: 99%

“…However, it is hard to say that there is a decoupling for most of these countries. Nachane and Dubey (2013) investigated the decoupling circumstance between EMEs and the OECD countries and also between EMEs and advanced countries in the period of 1974-2010. They used growth rate data for these countries in the scope of nonstationary spectral causality testing and wavelet correlations methods.…”

Section: Literature Reviewmentioning

confidence: 99%

See 2 more Smart Citations

Are China and India decoupling from the United States?

Arıç

Taştan

2018

Panoeconomicus

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After the 2008 global economic crisis, there has been an attention on decoupling conditions between emerging and advanced economies in the economic literature. There have been different conclusions about decoupling. In this study, we analyzed the conditions decoupling China and India from the United States. We used the autoregressive distributed lag (ARDL) bounds testing approach for the period of 1960-2014. According to the results of the analysis, the U.S. gross domestic product (GDP), export, and import indicators have no long-term relationship with China's and India's GDP.

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Section: Resultssupporting

confidence: 92%

Section: Theoretical Perspectivementioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

Are China and India decoupling from the United States?

Arıç

Taştan

2018

Panoeconomicus

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show abstract

“…Akin and Kose (2008), Kose et al (2008), Fidrmuc et al (2008) etc). The recent global financial crisis in the US and Europe initially put the decoupling hypothesis under some strain, but the hypothesis seems to have received renewed attention , as the major emerging market economies have already resumed their pre-crisis robust growth trajectories, even though significant global recovery is still unavailable (see Nachane and Dubey (2013) and Pesce (2016) for a recent survey).…”

Section: An Application To the Decoupling Problem In Economicsmentioning

confidence: 99%

The Spectral Envelope: An Application to the Decoupling Problem in Economics

Nachane

Dubey

2021

J. Quant. Econ.

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In this paper we introduce the technique of spectral envelope into the analysis of decoupling problem in Economics. Decoupling refers to the phenomenon that the business cycles in emerging market economies are de-synchronized from cyclical movements in the advanced economies. The analysis shows that all the countries in the sample have a common cycle of approximately 42 months. The results point to a strong possibility of a common global cycle of a periodicity between 3 to 4 years.

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“…Sun and Wang (1996) applied both approaches to confirm the dynamic relationship between global surface temperature and carbon dioxide (CO 2 ). Generally, in applied economics, we have the accounts of Auerbach and Rutner (1976); Jones and Uri (1987); Erol and Balkan (1991); Dropsy (1996);Gelper, Lemmens and Croux (2007); Ashley and Ye (2012) and Nachane and Dubey (2013).…”

mentioning

confidence: 99%

Do sunspot numbers cause global temperatures? Evidence from a frequency domain causality test

2014

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This paper applies the causality test in the frequency domain, developed by Breitung and Candelon (2006), to analyze whether sunspot numbers (used as a partial approximation to solar irradiance) cause global temperatures, using monthly data covering the time period 1880:1-2013:9. While, standard time domain Granger causality test fails to reject the null hypothesis that sunspot numbers does not cause global temperatures for both full and sub-samples (identified based on tests of structural breaks), the frequency domain causality test detects predictability for both the full-sample and the last sub-sample at short (2 to 2.6 months) and long (10.3 months and above) cycle lengths respectively. Our results highlight the importance of analyzing causality using the frequency domain test, which, unlike the time domain Granger causality test, allows us to decompose causality by different time horizons, and hence, could detect predictability at certain cycle lengths even when the time domain causality test might fail to pick up any causality. Further, given the wide-spread discussion in the literature, that results for the full-sample causality, irrespective of whether it is in time or frequency domains, cannot be relied upon when there are structural breaks present, and one needs to draw inference regarding causality from the sub-samples, we can conclude that there has been an emergence of causality running from sunspot numbers to global temperatures only recently at cycle length of 10.3 months and above.

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Trend and cyclical decoupling: new estimates based on spectral causality tests and wavelet correlations

Cited by 15 publications

References 21 publications

Are China and India decoupling from the United States?

Are China and India decoupling from the United States?

The Spectral Envelope: An Application to the Decoupling Problem in Economics

Do sunspot numbers cause global temperatures? Evidence from a frequency domain causality test

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