Trade and business cycle synchronization in OECD countries--A re-examination
AbstractThis paper re-examines the relationship between trade intensity and business cycle synchronization for 21 OECD countries in the period 1970-2003. Instead of using instrumental variables, we estimate a multivariate model including variables capturing specialization and similarity of economic policies. We confirm that trade intensity affects synchronization, but the effect is much smaller than previously reported. Other factors, like specialization and convergence in monetary and fiscal policies, have a similar impact on business cycle synchronization as trade intensity. The effect of trade on synchronization is not driven by outliers. However, the impact of trade on synchronization is not robust across deciles.
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Bibliographic InfoArticle provided by Elsevier in its journal European Economic Review.
Volume (Year): 52 (2008)
Issue (Month): 4 (May)
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Web page: http://www.elsevier.com/locate/eer
Other versions of this item:
- Robert Inklaar & Richard Jong-A-Pin & Jakob de Haan, 2005. "Trade and Business Cycle Synchronization in OECD Countries - a Re-examination," CESifo Working Paper Series 1546, CESifo Group Munich.
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