Green business cycle: an analysis on China and France

Abstract

Business cycle analysis generated an essential impulse in stimulating and provoking interesting academic and professional debates within a growth perspective. In fact, measuring business cycles is critical in determining the stylized facts on the cyclical behavior of aggregate macroeconomic indicators over time. As green growth topics started to occupy much academic interest, the question of the co-existence of equitable and sustainable development as well as current dynamics and cyclical features of economic growth comes into foreplay. This paper aims to evaluate cyclical characteristics of green growth related variables by observing two countries that showed different green policy aspirations over time, namely China and France. Following the paper's main objective, we want to provide a detailed analysis of the extent to which Green GDP and relevant output measures are comparable in a wider 'deviation cycle' context that includes cycle correlation, cycle coherence, and cycle magnitude. Results suggest that business cycles of GDP/GNI and Green GDP are strongly connected and coherent to a high degree. However, we found that the strength of that nexus and the degree of similarity has changed considerably over time, yet in a positive way.