Globalisation: the end of national economic policy?

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In recent years, global integration of goods, capital, and financial markets has advanced significantly. The 66th annual meeting of the Association of German Economics Research Institutes (ARGE) examined national macroeconomic policies amid increasingly interdependent business cycles. Koll introduces the history of business cycle co-movement and emphasizes the role of national governments as global players. The first section discusses the evolution of business cycle synchronization, with Flaig, Sturm, and Woitek noting that while the oil shocks of the 1970s caused strong co-movements, German unification resulted in divergent national cycles. Fichtner's paper analyzes synchronization over time and identifies common shocks and technology spillovers as key drivers of output co-movement. The second section delves into individual transmission mechanisms. Horn finds that business confidence transfers between countries, with positive expectations in the US bolstering German confidence over time. Schröder quantifies the influence of stock market investors' confidence on US and German GDP, identifying a direct causal impact. The third section focuses on economic policy implications. Kuhn examines monetary policy shock transmission, highlighting interest rate co-movements as more significant than trade or exchange rate mechanisms. Middendorf and Radmacher-Nottelmann explore the role of multinationals, revealing macro evidence of synchro