This article considers the evolution of international business cycle interdependencies among 27 developed and developing countries since the beginning of 1870s, utilizing the generalized vector autoregressive (VAR)-based spillover index of Diebold and Yilmaz (2012), which allows the construction...

Does aggressive use of discretionary fiscal policy induce macroeconomic instability in terms of higher output and inflation volatility? Three main conclusions arise from our cross section and panel analysis for a sample of 20 OECD countries: first, discretionary fiscal policy has a significant...