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Has globalization increased the synchronicity of international business cycles?

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  • Travis J. Berge

Abstract

The inexorable rise in levels of interaction and interdependence among the nations of the world has, over the past several decades, caused their economies' business cycles to grow ever more synchronized. ; That is one finding that emerges from an examination of the chronologies of business cycle turning points, in 32 major economies, over a 40-year period. Author Travis Berge demonstrates these cycles have grown more synchronized as trade flows have expanded. ; However, although the trend does seem to be driven by trade linkages, it appears that financial linkages play little or no role. Countries with ever deepening trade relations see their business cycles increasingly aligned; but cross-border holdings of financial assets are not found to have a significant impact on business cycle synchronization.

Suggested Citation

  • Travis J. Berge, 2012. "Has globalization increased the synchronicity of international business cycles?," Economic Review, Federal Reserve Bank of Kansas City, issue Q III.
  • Handle: RePEc:fip:fedker:y:2012:i:qiii:n:v.97no.3:x:3
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    Cited by:

    1. Agnieszka Domańska & Dobrmił Serwa, 2014. "Synchronizacja cykli koniunkturalnych a podatność gospodarek krajów Europy na skutki kryzysu gospodarczego 2008-2009," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 37.
    2. Andreas Brunhart, 2015. "The Swiss Business Cycle and the Lead of Small Neighbor Liechtenstein," Arbeitspapiere 51, Liechtenstein-Institut.
    3. Paul Gaggl & Sylvia Kaufmann, 2014. "The Cyclical Component of Labor Market Polarization and Jobless Recoveries in the US," Working Papers 14.03, Swiss National Bank, Study Center Gerzensee.
    4. Berge, Travis J. & Cao, Guangye, 2014. "Global effects of U.S. monetary policy: is unconventional policy different?," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 5-31.
    5. Lillie Lam & James Yetman, 2013. "Asia's Decoupling: Fact, Fairytale or Forecast?," Pacific Economic Review, Wiley Blackwell, vol. 18(3), pages 321-344, August.
    6. Lillie Lam & James Yetman, 2013. "Asia’s decoupling: fact, forecast or fiction?," BIS Working Papers 438, Bank for International Settlements.

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    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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