Advanced Search
MyIDEAS: Login to save this paper or follow this series

China in the world economy: Dynamic correlation analysis of business cycles

Contents:

Author Info

  • Fidrmuc, Jarko

    (BOFIT)

  • Korhonen, Iikka

    ()
    (BOFIT)

  • Bátorová, Ivana

    (BOFIT)

Abstract

We analyze the business cycles in China and in selected OECD countries between 1992 and 2006 using dynamic correlations. Nearly all OECD countries showpositive correlations of the very hort-run developments which may correspond to intensive supplier linkages. However, dynamic correlations at the business cycle frequencies are negative. Countries facing a comparably longer history of intensive trading links tend to show slightly higher correlations of business cycles with China. Even though trade and financial flows do not really increase correlations of business cycles between China and OECD countries, they lower the degree of business cycle synchronization within the OECD area.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/dp0708.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 7/2008.

as in new window
Length: 24 pages
Date of creation: 17 Jun 2008
Date of revision:
Handle: RePEc:hhs:bofitp:2008_007

Contact details of provider:
Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
Phone: + 358 10 831 2268
Fax: + 358 10 831 2294
Email:
Web page: http://www.suomenpankki.fi/bofit_en/
More information through EDIRC

Related research

Keywords: business cycles; synchronization; trade; FDI; dynamic correlation;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Kiyotaka Sato & Zhaoyong Zhang, 2006. "Real Output Co-movements in East Asia: Any Evidence for a Monetary Union?," The World Economy, Wiley Blackwell, vol. 29(12), pages 1671-1689, December.
  2. Croux, Christophe & Forni, Mario & Reichlin, Lucrezia, 1999. "A Measure of Comovement for Economic Variables: Theory and Empirics," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2339, C.E.P.R. Discussion Papers.
  3. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, Elsevier, vol. 115(1), pages 53-74, July.
  4. M. Ayhan Kose & Christopher Otrok & Eswar S. Prasad, 2008. "Global Business Cycles: Convergence or Decoupling?," NBER Working Papers 14292, National Bureau of Economic Research, Inc.
  5. Lionel Fontagné & Michael Freudenberg, 1999. "Endogenous Symmetry of Shocks in a Monetary Union," Open Economies Review, Springer, Springer, vol. 10(3), pages 263-287, July.
  6. M. Ayhan Kose & Kei-Mu Yi, 2005. "Can the standard international business cycle model explain the relation between trade and comovement?," Working Papers 05-3, Federal Reserve Bank of Philadelphia.
  7. Inklaar, Robert & Jong-A-Pin, Richard & de Haan, Jakob, 2008. "Trade and business cycle synchronization in OECD countries--A re-examination," European Economic Review, Elsevier, vol. 52(4), pages 646-666, May.
  8. Soyoung Kim & Jong‐Wha Lee & Cyn‐Young Park, 2011. "Emerging Asia: Decoupling or Recoupling," The World Economy, Wiley Blackwell, vol. 34(1), pages 23-53, 01.
  9. Korhonen, Iikka & Fidrmuc , Jarko, 2009. "The impact of the global financial crisis on business cycles in Asian emerging economies," BOFIT Discussion Papers, Bank of Finland, Institute for Economies in Transition 11/2009, Bank of Finland, Institute for Economies in Transition.
  10. Dong He & Wei Liao, 2011. "Asian Business Cycle Synchronisation," Working Papers 062011, Hong Kong Institute for Monetary Research.
  11. Frankel, Jeffrey A & Rose, Andrew K, 1996. "The Endogeneity of the Optimum Currency Area Criteria," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1473, C.E.P.R. Discussion Papers.
  12. Alessandro Borin & Riccardo Cristadoro & Roberto Golinelli & Giuseppe Parigi, 2012. "Forecasting world output: the rising importance of emerging economies," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 853, Bank of Italy, Economic Research and International Relations Area.
  13. Peter B. Kenen, 2000. "Currency Areas, Policy Domains, and the Institutionalization of Fixed Exchange Rates," CEP Discussion Papers dp0467, Centre for Economic Performance, LSE.
  14. Salvatore Dell'Erba & Emanuele Baldacci & Tigran Poghosyan, 2011. "Spatial Spillovers in Emerging Market Spreads," IMF Working Papers 11/221, International Monetary Fund.
  15. Dean, Judith M. & Lovely, Mary E. & Mora, Jesse, 2009. "Decomposing China-Japan-U.S. trade: Vertical specialization, ownership, and organizational form," Journal of Asian Economics, Elsevier, vol. 20(6), pages 596-610, November.
  16. Dean, Judith & Fung, K.C. & Wang, Zhi, 2008. "How vertically specialized is Chinese trade?," BOFIT Discussion Papers, Bank of Finland, Institute for Economies in Transition 31/2008, Bank of Finland, Institute for Economies in Transition.
  17. Paul De Grauwe & Zhaoyong Zhang, 2006. "Introduction: Monetary and Economic Integration in the East Asian Region," The World Economy, Wiley Blackwell, vol. 29(12), pages 1643-1647, December.
  18. Kwiatkowski, D. & Phillips, P.C.B. & Schmidt, P., 1990. "Testing the Null Hypothesis of Stationarity Against the Alternative of Unit Root : How Sure are we that Economic Time Series have a Unit Root?," Papers, Michigan State - Econometrics and Economic Theory 8905, Michigan State - Econometrics and Economic Theory.
  19. S. Borağan Aruoba & Francis X. Diebold & M. Ayhan Kose & Marco E. Terrones, 2010. "Globalization, the Business Cycle, and Macroeconomic Monitoring," NBER Chapters, in: NBER International Seminar on Macroeconomics 2010, pages 245-286 National Bureau of Economic Research, Inc.
  20. Fidrmuc, Jarko, 2001. "The Endogeneity of optimum currency area criteria, intraindustry trade and EMU enlargement," BOFIT Discussion Papers, Bank of Finland, Institute for Economies in Transition 8/2001, Bank of Finland, Institute for Economies in Transition.
  21. Jarko Fidrmuc, 2001. "The Endogeneity of the Optimum Currency Area Criteria, Intraindustry Trade, and EMU Enlargement," LICOS Discussion Papers, LICOS - Centre for Institutions and Economic Performance, KU Leuven 10601, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  22. Matthieu Bussière & Arnaud Mehl, 2008. "China's and India's roles in global trade and finance - twin titans for the new millennium?," Occasional Paper Series 80, European Central Bank.
  23. Julian Messina & Chiara Strozzi & Jarkko Turunen, 2009. "Real Wages over the Business Cycle: OECD Evidence from the Time and Frequency Domains," Working Papers 2009-02, FEDEA.
  24. Shin, Kwanho & Wang, Yunjong, 2004. "Trade integration and business cycle co-movements: the case of Korea with other Asian countries," Japan and the World Economy, Elsevier, Elsevier, vol. 16(2), pages 213-230, April.
  25. Andrew Hughes Hallett & Christian Richter, 2009. "Economics in the Backyard: How Much Convergence is there between China and her Special Regions?," The World Economy, Wiley Blackwell, vol. 32(6), pages 819-861, 06.
  26. Glenn Otto & Graham Voss & Luke Willard, 2001. "Understanding OECD Output Correlations," RBA Research Discussion Papers, Reserve Bank of Australia rdp2001-05, Reserve Bank of Australia.
  27. Barry Eichengreen & Hui Tong, 2005. "Is China's FDI Coming at the Expense of Other Countries?," NBER Working Papers 11335, National Bureau of Economic Research, Inc.
  28. Marianne Baxter & Michael Kouparitsas, 2004. "Determinants of business cycle comovement: a robust analysis," Working Paper Series, Federal Reserve Bank of Chicago WP-04-14, Federal Reserve Bank of Chicago.
  29. Andrew Hughes Hallett & Christian Richter, 2011. "Is there clustering among the Eurozone economies? Evidence from how the EU's New Member States are converging," Journal of Economic Policy Reform, Taylor & Francis Journals, Taylor & Francis Journals, vol. 14(2), pages 127-150.
  30. Jean Imbs, 2003. "Trade, Finance, Specialization, and Synchronization," IMF Working Papers 03/81, International Monetary Fund.
  31. Kwanho Shin & Chan-Hyun Sohn, 2006. "Trade and Financial Integration in East Asia: Effects on Co-movements," The World Economy, Wiley Blackwell, vol. 29(12), pages 1649-1669, December.
  32. Michael J. Artis & Jarko Fidrmuc & Johann Scharler, 2008. "The transmission of business cycles," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(3), pages 559-582, 07.
  33. AkIn, Cigdem & Kose, M. Ayhan, 2008. "Changing nature of North-South linkages: Stylized facts and explanations," Journal of Asian Economics, Elsevier, vol. 19(1), pages 1-28, February.
  34. Matthieu Bussière & Jarko Fidrmuc & Bernd Schnatz, 2008. "EU Enlargement and Trade Integration: Lessons from a Gravity Model," Review of Development Economics, Wiley Blackwell, Wiley Blackwell, vol. 12(3), pages 562-576, 08.
  35. Artis, Michael J & Zhang, W, 1997. "International Business Cycles and the ERM: Is There a European Business Cycle?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 2(1), pages 1-16, January.
  36. Torres,Francisco & Giavazzi,Francesco (ed.), 1993. "Adjustment and Growth in the European Monetary Union," Cambridge Books, Cambridge University Press, number 9780521440196, 9.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Korhonen, Iikka & Fidrmuc , Jarko, 2009. "The impact of the global financial crisis on business cycles in Asian emerging economies," BOFIT Discussion Papers, Bank of Finland, Institute for Economies in Transition 11/2009, Bank of Finland, Institute for Economies in Transition.
  2. Shruthi Jayaram & Ila Patnaik & Ajay Shah, 2009. "Examining the decoupling hypothesis for India," Trade Working Papers 22972, East Asian Bureau of Economic Research.
  3. Andrew Hughes Hallett & Christian Richter, 2011. "Trans-Pacific Economic Relations and US-China Business Cycles : Convergence within Asia versus US Economic Leadership," Development Economics Working Papers 23244, East Asian Bureau of Economic Research.
  4. Andrew Hughes Hallett & Christian Richter, 2009. "Is the US no longer the economy of first resort? Changing economic relationships in the Asia-Pacific region," International Economics and Economic Policy, Springer, vol. 6(2), pages 207-234, July.
  5. Christian Dreger & Yanqun Zhang, 2011. "The Chinese Impact on GDP Growth and Inflation in the Industrial Countries," Discussion Papers of DIW Berlin 1151, DIW Berlin, German Institute for Economic Research.
  6. Christian Dreger & Yanqun Zhang, 2013. "Does the economic integration of China affect growth and inflation in industrial countries?," FIW Working Paper series, FIW 116, FIW.
  7. Pomenková, Jitka & Fidrmuc, Jarko & Korhonen, Iikka, 2014. "China and the World economy: Wavelet spectrum analysis of business cycles," BOFIT Discussion Papers, Bank of Finland, Institute for Economies in Transition 5/2014, Bank of Finland, Institute for Economies in Transition.
  8. M. J. Herrerias & Javier Ordoñez, 2011. "If the Unites States sneezes, does the world need paracetamol?," Working Papers, Economics Department, Universitat Jaume I, Castellón (Spain) 2011/03, Economics Department, Universitat Jaume I, Castellón (Spain).
  9. Feldkircher, Martin & Korhonen, Iikka, 2012. "The rise of China and its implications for emerging markets - Evidence from a GVAR model," BOFIT Discussion Papers, Bank of Finland, Institute for Economies in Transition 20/2012, Bank of Finland, Institute for Economies in Transition.
  10. Zuzana Kucerova & Jitka Pomenkova, 2014. "Financial and Trade Integration of Selected EU Regions: Dynamic Correlation and Wavelet Approach," MENDELU Working Papers in Business and Economics, Mendel University in Brno, Faculty of Business and Economics 2014-45, Mendel University in Brno, Faculty of Business and Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hhs:bofitp:2008_007. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Päivi Määttä).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.