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Trade Integration and Business Cycle Synchronization :, A Reappraisal with Focus on Asia, Romain Duval, Kevin Cheng, Kum Hwa Oh, Richa Saraf

Abstract
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
Table Of Contents
Cover; Contents; I. Introduction; II. Stylized Facts about Business Cycle Synchronization; A. Properties of Business Cycle Synchronization in Asia; B. The Role of Global, Regional and Sub-regional Factors; III. The Role of Trade in Driving BCS; A. A Bird's Eye View of the Literature; B. Methodology; C. Results; D. Interpretation; E. An Additional Model: Assessing China Spillovers; IV. Concluding Remarks and Policy Implications; References; Appendixes; I. Further Details about the Dynamic Factor Analysis; II. Further Details on the Data; III. Robustness for Econometrics-Using Four Periods
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (47 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9780147551580

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