Global synchronization of business cycles leads to economic stability worldwide.
The article explores how business cycles in different countries can become synchronized. The researchers focus on the interaction between inventory and sales expectations in each country, known as the Metzlerian short-run business cycle. They find that weakly connected countries tend to synchronize their cycles, with the phase difference between them converging to zero. This phenomenon is called mode-locking. The study suggests that international cycles can influence each other, leading to peaks and troughs in business cycles being aligned across connected countries.