Does Political Proximity Enhance Business Cycle Synchronization in the G7?

This paper aims to assess the main drivers influencing business cycle synchronization within the G7 countries. In addition to key elements such as the intensity of bilateral trade and the influence of financial linkages on synchronization; we introduce a new variable that represents the political alignment, which can substantially impact synchronization. In this study, we utilize the variable political distance as a proxy for political alignment, alongside traditional measures of trade intensity