Trade Integration and Business Cycle Synchronization : A Reappraisal with Focus on Asia /
This paper reexamines the relationship between trade integration and business cycle synchronization (BCS) using new value-added trade data for 63 advanced and emerging economies during 1995-2012. In a panel framework, we identify a strong positive impact of trade intensity on BCS-conditional on vari...
| Main Author: | |
|---|---|
| Other Authors: | , , |
| Format: | Journal |
| Language: | English |
| Published: |
Washington, D.C. :
International Monetary Fund,
2014.
|
| Series: | IMF Working Papers; Working Paper ;
No. 2014/052 |
| Online Access: | Full text available on IMF |
| Summary: | This paper reexamines the relationship between trade integration and business cycle synchronization (BCS) using new value-added trade data for 63 advanced and emerging economies during 1995-2012. In a panel framework, we identify a strong positive impact of trade intensity on BCS-conditional on various controls, global common shocks and country-pair heterogeneity-that is absent when gross trade data are used. That effect is bigger in crisis times, pointing to trade as an important crisis propagation mechanism. Bilateral intra-industry trade and trade specialization correlation also appear to increase co-movement, indicating that not only the intensity but also the type of trade matters. Finally, we show that dependence on Chinese final demand in value-added terms amplifies the international spillovers and synchronizing impact of growth shocks in China. |
|---|---|
| Item Description: | <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required |
| Physical Description: | 1 online resource (46 pages) |
| Format: | Mode of access: Internet |
| ISSN: | 1018-5941 |
| Access: | Electronic access restricted to authorized BRAC University faculty, staff and students |