Stylized Facts of the International Business Cycle Relevant for the Chilean Economy

Abstract

This paper analyzes macroeconomic regularities in the main economic blocks (i.e., the U.S., Europe, and Japan) and describes the interaction between key variables of these groups and their relationship with relevant variables for the Chilean economy such as commodities prices, capital flows and sovereign spreads. Among the main findings are (i) U.S. GDP growth leads by two quarters the growth in Europe, Japan, and Latin America; (ii) high synchronization in both inflationary processes and monetary policies is observed; (iii) industrialized countries’ GDP growth leads movements in copper and oil prices, while the Chinese economy presents a high contemporaneous correlation with copper prices; (iv) the U.S. real exchange rate leads the price of commodities, and (v) higher capital flows to emerging markets and lower sovereign spreads lead economic growth in industrialized economies.