Shocks in global economy: Impulse model of macroeconomic cycle

This chapter represents an attempt to analyze the role of shocks (impulses) in business cycles in the world economy in connection with the global financial crises of the late 2000s. The theoretical explanation of the origin of any economic shock (external impulse), of economic systems' reaction to it, as well as of the way the global shocks spread its influence all over the world suggests that the analytical predictions of E. Slutsky and R. Frish can be correct. The results provide some evidence for the hypothesis that the cyclical model of development of any economic system means its adjustment to new conditions caused by external impulses (shocks). To reinforce the findings, some results associated with other theoretical investigations and analytical researches are presented.