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Comovement and Macroeconomic Interdependence: Evidence for Latin America, East Asia, and Europe

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  • Norman Loayza
  • Humberto Lopez
  • Angel Ubide

Abstract

This paper analyzes common economic patterns across countries and economic sectors in Latin America, East Asia and Europe for the period 1970-94. This is done by means of an error-components model that decomposes real value-added growth in each country into common international effects, sector-specific effects and country-specific effects. We find significant comovement in the European and East Asian samples. In the Latin American sample, however, we find country-specific components to be considerably more important than common patterns. These results are robust to different sub-sample time spans and different sub-sample country groups.

Suggested Citation

  • Norman Loayza & Humberto Lopez & Angel Ubide, 1999. "Comovement and Macroeconomic Interdependence: Evidence for Latin America, East Asia, and Europe," Working Papers Central Bank of Chile 60, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:60
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    Cited by:

    1. Felipe Morandé & Klaus Schmidt-Hebbel, 2000. "Chile's Peso: Better than (Just) Living with the Dollar?," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 37(110), pages 177-226.
    2. Mejia-Reyes, P., 2004. "Classical Business Cycles in America: Are National Business Cycles Synchronised?," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 1(3), pages 75-102.
    3. Allegret, Jean-Pierre, 2007. "Disentangling Business Cycles and Macroeconomic policy in Mercosur: a VAR and an Unobserved Components Models Approaches," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 482-514.
    4. Jean-Pierre Allegret & Alain Sand-Zantman, 2009. "Modeling the Impact of Real and Financial Shocks on Mercosur: The Role of the Exchange Rate Regime," Open Economies Review, Springer, vol. 20(3), pages 359-384, July.
    5. Christian Volpe Martincus & Andrea Molinari, 2007. "Regional Business Cycles and National Economic Borders: What Are the Effects of Trade in Developing Countries?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(1), pages 140-178, April.
    6. Felipe Morandé L. & Klaus Schmidt-Hebbel D., 2000. "Alternative monetary schemes: a positive evaluation for the chilean peso," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 3(1), pages 57-84, April.
    7. Fabio Canova, 2005. "The transmission of US shocks to Latin America," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(2), pages 229-251.
    8. Gachet, Ivan & Maldonado, Diego & Oliva, Nicolas & Ramirez, Jose, 2011. "Hechos Estilizados de la Economía Ecuatoriana: El Ciclo Económico 1965-2008 [Stylized Facts of the Ecuadorian Economy: The Economic Chicle 1965-2008]," MPRA Paper 30280, University Library of Munich, Germany.
    9. Xinpeng Xu, 2002. "Les provinces chinoises se sont-elles intégrées durant les réformes ?," Revue d’économie du développement, De Boeck Université, vol. 10(3), pages 9-32.
    10. Ariadne M. Checo & Salomé Pradel & Francisco A. Ramírez, 2017. "The Effects of USA Monetary Policy on Central America and the Dominican Republic," Investigación Conjunta-Joint Research, in: Ángel Estrada García & Alberto Ortiz Bolaños (ed.), International Spillovers of Monetary Policy, edition 1, chapter 7, pages 189-222, Centro de Estudios Monetarios Latinoamericanos, CEMLA.
    11. Xu, Xinpeng, 2002. "Have the Chinese provinces become integrated under reform?," China Economic Review, Elsevier, vol. 13(2-3), pages 116-133.
    12. Fabio Canova, 2005. "The transmission of US shocks to Latin America," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(2), pages 229-251.
    13. Urom, Christian & Guesmi, Khaled & Abid, Ilyes & Dagher, Leila, 2023. "Dynamic integration and transmission channels among interest rates and oil price shocks," The Quarterly Review of Economics and Finance, Elsevier, vol. 87(C), pages 296-317.
    14. Jean-Pierre Allegret & Alain Sand-Zantman, 2007. "Transmission des chocs et mécanismes d'ajustement dans le Mercosur," Revue de l'OFCE, Presses de Sciences-Po, vol. 101(2), pages 355-392.
    15. Lamberte, Mario B. & Milo, Melanie S. & Pontines, Victor, 2001. "NO to ¥E$? Enhancing Economic Integration in East Asia through Closer Monetary Cooperation," Discussion Papers DP 2001-16, Philippine Institute for Development Studies.
    16. Islam, Roumeen, 2000. "Should capital flows be regulated? - a look at the issues and policies," Policy Research Working Paper Series 2293, The World Bank.
    17. Checo, Ariadne & Pradel, Salome & Ramirez, Francisco A., 2015. "Measuring the Effects of the ‘Normalization’ of US Monetary Policy on Central America and the Dominican Republic," MPRA Paper 68293, University Library of Munich, Germany.
    18. Glick, R., 2000. "Fixed or Floating: Is It Still Possible to Manage in the Middle?," Papers pb00-02, Economisch Institut voor het Midden en Kleinbedrijf-.

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