Contagious switching
使用包含多个定性状态变量的向量自回归模型，分析衰退如何在国家间传播，并以加拿大、墨西哥和美国为例，检验北美自由贸易协定前后溢出效应的变化，发现贸易自由化增强了经济周期的跨国传播。
Summary We analyze the propagation of recessions across countries using a model with multiple qualitative state variables in a vector autoregression (VAR). The VAR may include country‐level variables to determine whether policy also propagates across countries. We consider versions of the model with observed discrete states or unobserved discrete states, where the latter is inferred from fluctuations in economic data. We apply the model to Canada, Mexico, and the United States to test if spillover effects were similar before and after the North American Free Trade Agreement (NAFTA). We find that trade liberalization increased business cycle propagation across the three countries.