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China in the World Economy: Dynamic Correlation Analysis of Business Cycles

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  • Jarko, Fidrmuc
  • Iikka, Korhonen
  • Ivana, Bátorová

Abstract

We analyze globalization and business cycles in China and selected OECD countries using dynamic correlation analysis. We show that dynamic correlations of business cycles of OECD countries and China are negative at business-cycle frequencies and positive for short-run developments. Furthermore, trade and financial flows of OECD countries and China reduce the degree of business cycle synchronization within the OECD area, especially at business-cycle frequencies. Thus, different degrees of participation in globalization can explain the differences between the business cycles of OECD countries.

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Bibliographic Info

Paper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number 2011-9.

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Length: 30, 12 p.
Date of creation: Dec 2011
Date of revision:
Handle: RePEc:hit:hitcei:2011-9

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

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Citations

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Cited by:
  1. 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.
  2. 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.
  3. 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.
  4. Christian Dreger & Yanqun Zhang, 2013. "Does the economic integration of China affect growth and inflation in industrial countries?," FIW Working Paper series 116, FIW.
  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. Jayaram, Shruthi & Patnaik, Ila & Shah, Ajay, 2009. "Examining the decoupling hypothesis for India," Working Papers 09/61, National Institute of Public Finance and Policy.
  7. Zuzana KucÌŒerovaÌ & Jitka Pomenkova, 2014. "Financial and Trade Integration of Selected EU Regions: Dynamic Correlation and Wavelet Approach," MENDELU Working Papers in Business and Economics 2014-45, Mendel University in Brno, Faculty of Business and Economics.
  8. 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.
  9. Pomenková, Jitka & Fidrmuc, Jarko & Korhonen, Iikka, 2014. "China and the World economy: Wavelet spectrum analysis of business cycles," BOFIT Discussion Papers 5/2014, Bank of Finland, Institute for Economies in Transition.
  10. 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).

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