External influences in Nordic business cycles, 1870–1988

This paper considers the relationship of the Nordic business cycle to the world business cycle using annual output data spanning 1870–1988. The paper studies the Nordic and a set of non-Nordic countries separately and finds evidence for both a Nordic and a world business cycle. Output movements in the individual Nordic countries are connected through the Nordic business cycle and are less affected by the world business cycle. There is no significant change in the behavior of the business cycle in the Nordic countries between 1873–1913 and 1948–1988.