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

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  • 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.

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Bibliographic Info

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

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

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Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
Phone: + 358 10 831 2268
Fax: + 358 10 831 2294
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Web page: http://www.suomenpankki.fi/bofit_en/
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Keywords: business cycles; synchronization; trade; FDI; dynamic correlation;

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References

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Citations

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Cited by:
  1. M. J. Herrerias & Javier Ordoñez, 2011. "If the Unites States sneezes, does the world need paracetamol?," Working Papers 2011/03, Economics Department, Universitat Jaume I, Castellón (Spain).
  2. Hallett, Andrew Hughes & Richter, Christian, 2011. "Trans-Pacific Economic Relations and US-China Business Cycles: Convergence within Asia versus US Economic Leadership," ADBI Working Papers 292, Asian Development Bank Institute.
  3. 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.
  4. Jayaram, Shruthi & Patnaik, Ila & Shah, Ajay, 2009. "Examining the decoupling hypothesis for India," Working Papers 09/61, National Institute of Public Finance and Policy.
  5. Jarko Fidrmuc & Iikka Korhonen, 2009. "The Impact of the Global Financial Crisis on Business Cycles in Asian Emerging Economies," CESifo Working Paper Series 2710, CESifo Group Munich.
  6. 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.
  7. Feldkircher, Martin & Korhonen, Iikka, 2012. "The rise of China and its implications for emerging markets - Evidence from a GVAR model," BOFIT Discussion Papers 20/2012, Bank of Finland, Institute for Economies in Transition.

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