Nearest neighbours

Digging down into the business cycle synchronization analysis, we analyse the evolution over time of the “nearest neighbours” of any given country.

We show below the three countries which have moved most in line with GDP growth of the United States over a 24 quarter window, over the period 1973 to 2019.

We use a non-linear kernel transformation of the data, so that similarity between any two countries is measured not only from the correlation between the two, but also taking into account the correlation between them and all other countries in the set used for the analysis.

Here is an example for the United States and the three economies moving most similar to it over each 24 quarter window. Red indicates that a country is one of the three nearest neighbours (we highlight the US itself in the chart).