Atlantic Economic Journal

, Volume 25, Issue 1, pp 60–79 | Cite as

Is there a business cycle in Singapore? Is there a Singaporean business cycle?

  • Francisco D. A. Nadal de Simone
  • Jose L. Tongzon


This paper explores the existence and examines the characteristics, if any, of business cycles in Singapore. Specifically, the authors ask: Is there a business cycle in Singapore? Is there a Singaporean business cycle? Unlike earlier studies, this paper investigates whether or not there exists a business cycle in Singapore and employs cross-spectral analysis and factor analysis which have advantages over the time-domain techniques. The study shows that there is a business cycle in Singapore and its frequency does not coincide with the periodicity of the two recessions experienced by the country. However, the business cycle is not in any meaningful way Singaporean, as evidenced by the existence of three international factors explaining about 99 percent of the common variance of the series. The idiosyncratic factor is well below 1 percent in all Association of Southeast Asian Nations countries with the exception of the Philippines. The findings have a number of significant implications both from the theoretical and policymaking viewpoint.


International Economic Business Cycle Public Finance Common Variance Significant Implication 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Abeysinghe, Tilak; Lee, Christopher. "Best Linear Unbiased Intrapolation of Quarterly GDP: The Case of Malaysia," Department of Economics and Statistics, National University of Singapore, mimeo, 1994.Google Scholar
  2. Ahmed, S.; Park, J. H. "Sources of Macroeconomic Fluctuations in Small Open Economies,"Journal of Macroeconomics, 16, 1994, pp. 1–36.CrossRefGoogle Scholar
  3. Andresen, Svein; Everaert, Luc. "International Macroeconomic Interdependence,"Annales d'Economie et de Statistique, 6/7, 1987, pp. 161–81.Google Scholar
  4. Baxter, Marian; Stockman, Alan. "Business Cycles and the Exchange Rate Regime: Some International Evidence,"Journal of Monetary Economics, 23, 1989, pp. 377–400.CrossRefGoogle Scholar
  5. Bergman, M.; Gerlach, S.; Jonung, L. "External Influences in Nordic Business Cycles," unpublished working paper, 1990.Google Scholar
  6. Camen, Ulrich. "Concepts and Measurements of World Business Cycles," in P. Artus; Y. Barroux; G. McKenzie, eds.,Policy Coordination and the International Transmission of Disturbances, London, United Kingdom: Macmillan, 1990.Google Scholar
  7. Chambers, V. "ASEAN-EC Relations: The Intersection of Two Regional Groupings or the Rise of Economic Rivals?,"Journal of Asian Business, 9, 2, 1993, pp. 55–76.Google Scholar
  8. DeJong, David N.; Whiteman, Charles H. "Reconsidering ‘Trends and Random Walks in Macroeconomic Time Series,"Journal of Monetary Economics, 28, 1991, pp. 221–54.Google Scholar
  9. DeJong, David N.; Nankervis, John C.; Savin, Eugene N; Whiteman, Charles C. "Integration Versus Trend Stationarity in Time Series,"Econometrica, 60, 1992, pp. 423–33.Google Scholar
  10. Dellas, H. "A Real Model of the World Business Cycle,"Journal of International Money and Finance, 5, 1986, pp. 381–94.CrossRefGoogle Scholar
  11. Dickey, David A.; Fuller, Wayne A. "Distribution of the Estimators for Autoregressive Time Series with a Unit Root,"Journal of the American Statistical Association, 74, 1979, pp. 427–31.Google Scholar
  12. __ "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root,"Econometrica, 49, 1981, pp. 1057–72.Google Scholar
  13. Doldado, Juan; Jenkinson, Tim; Sosvilla-Rivero, Simon. "Cointegration and Unit Roots," Journal of Economic Surveys, 4, 1990, pp. 249–73.Google Scholar
  14. Enders, Walter.Applied Econometric Time Series, New York NY: John Wiley & Sons, 1995.Google Scholar
  15. Engle, Robert F.; Granger, Clive W. J. "CoIntegration and Error-Correction: Representation, Estimation, and Testing,"Econometrica, 55, 1987, pp. 251–76.Google Scholar
  16. Engle, Robert F.; Yoo, Byung S. "Forecasting and Testing in Co-Integrated Systems,"Journal of Econometrics, 35, 1987, pp. 143–59.CrossRefGoogle Scholar
  17. Fuller, Wayne A.Introduction to Statistical Time Series, New York, NY: John Wiley & Sons, 1976.Google Scholar
  18. Gardner, E. S. "Exponential Smoothing: The State of the Art,"Journal of Forecasting, 4, 1985, pp. 1–28.Google Scholar
  19. Gerlach, Stefan H. M. "World Business Cycles under Fixed and Flexible Exchange Rates,"Journal of Money, Credit and Banking, 20, 4, 1988, pp. 621–32.Google Scholar
  20. Gerlach, Stefan; Klock, J. "State-Space Estimates of International Business Cycles,"Economics Letters, 28, 1988, pp. 231–4.CrossRefGoogle Scholar
  21. Ghysels, Eric. "Unit-Root Tests and the Statistical Pitfalls of Seasonal Adjustment: The Case of U.S. Postwar Real Gross National Product,"Journal of Business and Economic Statistics, 8, 1990, pp. 145–52.Google Scholar
  22. Ickes, B. "Do Socialist Countries Suffer a Common Business Cycle?,"Review of Economics and Statistics, 72, 1990, pp. 397–405.Google Scholar
  23. Institute of Developing Economies.Business Cycles in Five ASEAN Countries, India and Korea, Tokyo, Japan: Insatsu Co., 1988, 1989.Google Scholar
  24. Koopmans, L. H.The Spectral Analysis of Time Series, New York, NY: Academic Press, 1974.Google Scholar
  25. Loehlin, John C.Latent Variable Models. An Introduction to Factor, Path, and Structural Analysis, 2nd ed., New Jersey: Lawrence Erlbaum Associates, 1992.Google Scholar
  26. Mookerjee, R.; Tongzon, J. L. "Small Open Economies and Business Cycles: Evidence of the ASEAN Group of Countries," Department of Economics and Statistics, National University of Singapore, mimeo, 1994.Google Scholar
  27. Nadal De Simone, Francisco D. A. "Regional Integration Agreements: AFTA from a Comparative Perspective," in J. Tan, ed.,AFTA and the Changing International Economy, Singapore: Institute of Southeast Asian Studies, 1996.Google Scholar
  28. Nelson, Charles R.; Plosser, Charles I. "Trends and Random Walks in Macroeconomic Time Series: Some Evidence and Implications,"Journal of Monetary Economics, 10, 1982, pp. 139–62.CrossRefGoogle Scholar
  29. Phillips, Peter; Perron, Pierre. "Testing for a Unit Root in Time Series Regression,"Biometrica, 33, 1988, pp. 335–46.Google Scholar
  30. Priestley, M. B.Spectral Analysis and Time Series, London, United Kingdom: Academic Press, 1981.Google Scholar
  31. Said, S. E.; Dickey, David A. "Testing for Unit Roots in Autoregressive-Moving Average Models of Unknown Order,"Biometrica, 71, 1984, pp. 599–607.Google Scholar
  32. Saidi, N.; Huber, G. "Postwar Business Cycles and Exchange Rate Regimes," unpublished working paper, mimeo, 1983.Google Scholar
  33. Sargent, Thomas J.Macroeconomic Theory, London, United Kingdom: Academic Press, 1987.Google Scholar
  34. Schwert, William G. "Tests for Unit Roots: A Monte Carlo Investigation,"Journal of Business and Economic Statistics, 7, 1989, pp. 147–59.Google Scholar
  35. Swoboda, Alexander. "Exchange Rate Regimes and US-European Policy Independence,"International Monetary Fund Staff Papers, 30, 1983, pp. 75–102.Google Scholar

Copyright information

© International Atlantic Economic Society 1997

Authors and Affiliations

  • Francisco D. A. Nadal de Simone
    • 1
  • Jose L. Tongzon
    • 2
  1. 1.Reserve Bank of New ZealandNew Zealand
  2. 2.National University of SingaporeSingapore

Personalised recommendations