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Marge extensive du commerce et synchronisation des cycles

Author

Listed:
  • Jean-Sébastien Pentecôte
  • Jean-Christophe Poutineau
  • Fabien Rondeau

Abstract

This paper shows that an increase in trade integration has mixed effects on business cycle synchronization. In a two country dsge model with flexible prices we show that an increase in the extensive margin of trade reduces the coupling of business cycles with regard to a trade increase affecting only the intensive margin. This phenomenon comes from a dampening in the terms of trade adjustment. Empirically we find that, for a group of ten European countries between 1995 and 2007, an increase of 1% in the extensive margin of bilateral trade has reduced business cycle synchronization by something between 0.11 % and 0.34 % depending on the choice of control variables and the definition of the extensive margin of trade. Classification JEL : F4, F44, F15

Suggested Citation

  • Jean-Sébastien Pentecôte & Jean-Christophe Poutineau & Fabien Rondeau, 2012. "Marge extensive du commerce et synchronisation des cycles," Revue économique, Presses de Sciences-Po, vol. 63(3), pages 523-533.
  • Handle: RePEc:cai:recosp:reco_633_0523
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    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • F15 - International Economics - - Trade - - - Economic Integration

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