3 edition of Trade integration and business cycle co-movements found in the catalog.
Trade integration and business cycle co-movements
|Statement||Kwanho Shin and Yunjong Wang.|
|Series||KIEP working paper -- 02-08|
|Contributions||Wang, Yunjong., Korea Institute for International Economic Policy.|
In this study, we examine the issue of business cycle synchronization from a historical perspective in 27 developed and developing countries. Based on a novel complex network approach, the Threshold-Minimum Dominating Set (T-MDS), our results reveal heterogeneous patterns of international business cycle synchronization during fundamental globalization periods since the s. Downloadable! In this paper we explore three important areas where deeper trade and financial integration in East Asia can influence: (1) business cycle co‐movements in the region, (2) the extent of risk sharing across countries and (3) price co‐movements across countries. We find evidence that trade integration enhances co‐movements of output but not of consumption across countries.
influence of trade and financial integration on business cycle co-movements, which could be due, in part, to the lack of data on bilateral financial flows. This paper estimates the effect of bilateral trade and financial links on output co-movement for a small, open economy such as Spain. Caporale, G M and Girardi, A. (): "Business Cycles, International Trade and Capital Flows: Evidence from Latin America", DIW Berlin Discussion Papers Dai, Y. (): "Business Cycle Synchronization in Asia: The Role of Financial and Trade Linkages", ADB Working Paper Series on Regional Economic Integration No. / October
I investigate the determinants of business cycle synchronization across regions. The linkages between trade in goods, financial openness, specialization, and business cycle synchronization are evaluated in the context of a system of simultaneous equations. The . The Impact of Trade Integration on Business Cycle Co-Movements in Europe. By Kwanho Shin and Yunjong Wang. Cite. Business cycle co-movements, Europe, trade integration, trade intensity intraindustry trade, DOI identifier: /s OAI identifier: Provided by: Research Papers in Economics.
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Both of these linkages imply that increased trade leads to tighter business cycle co-movements. In sum, the theoretical implications of more trade integration on business cycle co-movements are not clear; to test the validity of the theories, an empirical investigation is in order.
Recently, Frankel and Rose () have investigated this issue. Based on 21 industrialized countries, they found that the more countries trade Cited by: By using data for 12 Asian economies, this paper finds that intra-industry trade is the major channel by which the business cycle of Korea becomes synchronized with that of other Asian economies, although increased trade itself does not necessarily lead to close business cycle coherence.
KW - Business cycle co-movements. KW - Intra-industry tradeCited by: Request PDF | Trade integration and business cycle co-movements: The case of Korea with other Asian countries | As Korea increases its trade within Asia, it is becoming more and more integrated.
As Korea increases its trade within Asia, it is becoming more and more integrated with the other economies in the region. Theoretically, increased trade can lead business cycles across trading partners to be patterned in either direction, towards convergence or by: Request PDF | The Impact of Trade Integration on Business Cycle Co-Movements in Europe | This paper extends our previous research on East Asia to the.
increased trade leads to tighter business cycle co-movements. In sum there are four different channels through which trade integration influences business cycle co-movements. Recently, Shin and Wang (, ) empirically identify these four channels for the analysis of East Asian.
"The Impact of Trade Integration on Business Cycle Co-Movements in Europe," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. (1), pagesApril. Business cycle co-movements Europe trade integration Trade Integration and Business Cycle Co-Movements: The Case of Korea with Other Asian Countries.
Japan and the World Economy 16 (2): – Google Scholar. Stock, J. H., and M. Watson (). Understanding Changes in International Business Cycle Dynamics. NBER Working Paper seems to be weaker than initially thought. The relationship between trade integration and business cycle synchronization (BCS) has been subject to extensive research, motivated in good part by the optimum currency area literature (OCA) that was pioneered by Mundell () and McKinnon () and given new impetus by Frankel and Rose (, ).
has been experiencing increased integration with the Mainland through trade, Foreign Direct Investment (FDI), tourism, and increasingly financial flows. • Co-movements of business cycles in Hong Kong and the Mainland have increased steadily since the s. Although its co-movements. Business Cycle Co-movements and Economic Integration in East Asia integration ‾Facilitate trade and investment in the region ‾Prevent the recurrence of financial crisis 2.
Introduction(cont’d) • The role of the business-cycle co-movement in forming a monetary union. determinants of business cycles co-movements. Section 2 states the empirical methodology. Trade integration and cycle synchronization, however, are not in fact exogenous.
The underlying idea. Oppositely, in the canonical international business cycle model of Backus et al. (), high levels of trade could be correlated with low co-movement due to the strong substitutability of goods.
As an example, during the General Strike of May, in the United Kingdom, output collapsed, but German exports and output actually surged.
trade integration is associated with more synchronized business cycles. This result is fairly robust and holds up when possible endogeneity issues are taken into account. Among trade integration indicators considered, the bilateral trade intensity indicator exhibits a more robust relationship with the business cycle synchronization variable.
"Trade interdependence and the international business cycle," Journal of International Economics, Elsevier, vol. 34(), pagesFebruary. Alberto Alesina & Robert J. Barro, " Currency Unions," The Quarterly Journal of Economics, Oxford University Press, vol. (2), pages This paper analyzes the relationships that exist among foreign direct investment (FDI), trade and industry dissimilarity on business cycle co-movements using a panel data set taken from 77 pairs.
trade and financial integration on business cycle co-movements, which could be due, in part, to the lack of data on bilateral financial flows. This paper estimates the effect of bilateral trade and financial links on output co-movement for a small, open economy, namely Spain.
We assess whether these two. As trade integration deepens in East Asia, closer links among the business cycles of East Asian countries can be expected. Theoretically, however, increased trade could lead to either closer or looser business cycles across trading partners. Australian business cycle co-movements with the UK have also increased over the last 40 years, although somewhat later than with the US.
Both the bilateral trade share and bilateral openness have fallen sharply over the same period, again suggesting a negative relationship between trade and synchronicity (Figure 6). More on regional cooperation and integration Intra-industry trade among East Asian countries, rather than inter-industry trade, is the major factor explaining business cycle co-movements in the region.
This paper examines whether increasing trade intensity among East Asian countries has led to a synchronization of business cycles. The international co-movements of business cycles is a key determinant of trade and monetary policy, but the ways in which it is affected by technology, TFP, and trade openness are not fully understood.
This column shows how such co-movements are affected by trade linkages and technology. It finds that non-technology shocks contribute more to international co-movement than TFP shocks, and that transmission.
The paper finds that intra-industry trade, rather than inter-industry trade, is the major factor in explaining business cycle co-movements in both regions. The paper also supports the hypothesis that the relationship between trade intensity and output co-movement is stronger in East Asia than in Europe.The empirical results show the following: (1) similar and strong common external linkages have significant positive effects on regional business cycle synchronization; (2) after controlling for external linkages, internal trade integration has a positive effect on regional business cycle synchronization but internal financial integration has a.