Abhatoo - Centre Nationale de Documentation

I use monthly data on industrial production to estimate the distribution of international business cycle correlations since the 1980's, with focus on the current turmoil. The degree of international correlation in national business cycles since the end of 2008 is unprecedented in three decades. From 2008M12, an upward shift in the cross-sectional distribution of cycles synchronization is sizeable and signi cant, especially between advanced economies. The magnitude of the shift is unprecedented in recent history, even relative to what happened since 1980 after alternative shocks with worldwide consequences. Both goods and assets trade have contributed to this synchronization. The (large and signicant) synchronization amongst OECD economies is associated with nancial openness. The (weaker) diffusion amongst developing economies tends to happen between trade partners.