As Korea increases its trade with Asia, it is becoming more and more integrated with the other economies in the region. Theoretically, increase trade can lead business cycles across trading partners to be patterned in either direction, towards convergence or divergence. By using the data for twelve Asian economies, this paper finds that intra-industry trade is the major channel by which Korea's business cycle becomes more synchronized with that of other Asian economies, although increased trade itself does not necessarily lead to close business cycle coherence.
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Paper provided by East Asian Bureau of Economic Research in its series Trade Working Papers with number
358.
Length: 49 pages Date of creation: Aug 2002 Date of revision: Handle: RePEc:eab:tradew:358
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Find related papers by JEL classification: E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
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