Business Cycles in Some Selected Oil Producing Countries: Iran versus Three OECD Members

This paper analyses the fluctuations of the business cycle in selected oil-producing countries of the Organization for Economic Co-operation and Development (OECD) and Iran during the period 1970:Q1-2015:Q4. We start by using a two-stage Hodrick-Prescott filtering process to extract a cyclical component of GDP, then the modified BBQ algorithm is used to identify the chronologies and some measures of business cycle characteristics, and finally the main features of business cycle fluctuations (persistence, volatility, asymmetry, and synchronization) are estimated. The results indicate the difference in the characteristics of business cycle fluctuations in countries with different levels of economic development. Both amplitude and severity of Iran as a developing country were high, and average duration of contraction was longer than expansion. As a result, asymmetries in both steepness and deepness are observed in Iran. Meanwhile, output persistence and volatility in Iran were above and below that of three OECD members' average, respectively. The last part is based on the three indices for evaluating synchronization. Other findings reveal a high degree of synchronization between countries except Iran.