Business Cycle Stylized Facts in the OECD Countries

In the following sections, I analyze the cyclical structure of prices and money stock (Ml) in addition to the GDP and its components. 1 As stated above, the business cycle stylized facts of these series are analyzed in the modern literature focussing on the following basic aspects: (1) The amplitude of the fluctuations; and (2) the degree of comovement with a measure for the output, together with the phase shift of the series relative to the output cycle. Lucas (1977), p. 218 summarizes the commonly accepted view concerning these aspects: There is, as far as I know, no need to qualify these observa-tions by restricting them to particular countries or time periods: they appear to be regularities common to all decentralized market economies. Though there is absolutely no theoretical reason to anticipate it, one is led by the facts to conclude that, with respect to the qualitative behavior of co-movements among series , business cycles are all alike. To theoretically inclined economists, this conclusion should be attractive and challenging, for it suggests the possibility of a unified explanation of business cycles, rather than in political or institutional characteristics specific to particular countries or periods.