Business cycle synchronisation in East Asia
AbstractAgainst the background of the rapid inter- and intra-regional integration of East Asia, we examine the extent and nature of synchronisation of business cycles in the region. We estimate a dynamic common factor model for output growth of 10 East Asian countries. A significant common factor is shared by all Asian countries considered, except China and Japan. The degree of synchronisation has fluctuated over time, with an upward trend particularly evident for the newly industrialised economies. Synchronisation appears to mainly reflect strong export synchronisation, rather than common consumption or investment dynamics. A number of external factors, such as the oil price and the JPY-USD exchange rate, appear to play a role in synchronising activity.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Asian Economics.
Volume (Year): 20 (2009)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/asieco
Business cycles synchronisation East Asia Dynamic factor model;
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