Explaining International Business Cycle Synchronization
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Explaining International Business Cycle Synchronization
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Author : Robert Miguel W. K. Kollmann
language : en
Publisher:
Release Date : 2017
Explaining International Business Cycle Synchronization written by Robert Miguel W. K. Kollmann and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with Business cycles categories.
Explaining International Business Cycle Synchronization
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Author : Robert Miguel W. K. Kollmann
language : en
Publisher:
Release Date : 2017
Explaining International Business Cycle Synchronization written by Robert Miguel W. K. Kollmann and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with Business cycles categories.
The business cycles of advanced economies are synchronized. Standard macro models fail to explain that fact. This paper presents a simple model of a two-country, two-traded good, complete-financial-markets world in which country-specific productivity shocks generate business cycles that are highly correlated internationally. The model assumes recursive intertemporal preferences (Epstein-Zin-Weil), and a muted response of labor hours to household wealth changes (due to Greenwood-Hercowitz-Huffman period utility and demand-determined employment under rigid wages). Recursive intertemporal preferences magnify the terms of trade response to country-specific shocks. Hence, a productivity (and GDP) increase in a given country triggers a strong improvement of the foreign country's terms of trade, which raises foreign labor demand. With a muted labor wealth effect, foreign labor and GDP rise, i.e. domestic and foreign real activity comove positively.
International Business Cycle Synchronization In Historical Perspective
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Author : Michael D. Bordo
language : en
Publisher:
Release Date : 2010
International Business Cycle Synchronization In Historical Perspective written by Michael D. Bordo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with Business cycles categories.
In this paper, we review and attempt to explain the changes in business cycle synchronization among 16 industrial countries and the over the past century and a quarter, demarcated into four exchange rate regimes. We find that there is a secular trend towards increased synchronization for much of the twentieth century and that it occurs across diverse exchange rate regimes. This finding is in marked contrast to much of the recent literature, which has focused primarily on the evidence for the past 20 or 30 years and which has produced mixed results. We then examine the role of global shocks and shock transmission in the trend toward synchronization. Our key finding here is that global (common) shocks generally are the dominant influence.
How Does Globalization Affect The Synchronization Of Business Cycles
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Author : Mr.Ayhan Kose
language : en
Publisher: International Monetary Fund
Release Date : 2003-03-04
How Does Globalization Affect The Synchronization Of Business Cycles written by Mr.Ayhan Kose and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003-03-04 with Business & Economics categories.
This paper examines the impact of rising trade and financial integration on international business cycle comovement among a large group of industrial and developing countries. The results provide at best limited support for the conventional wisdom that globalization has increased the degree of synchronization of business cycles. The evidence that trade and financial integration enhance global spillovers of macroeconomic fluctuations is stronger for industrial countries. One striking result is that, on average, cross-country consumption correlations have not increased in the 1990s, precisely when financial integration would have been expected to result in better risk-sharing opportunities, especially for developing countries.
Has Globalization Really Increased Business Cycle Synchronization
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Author : Eric Monnet
language : en
Publisher: International Monetary Fund
Release Date : 2016-03-08
Has Globalization Really Increased Business Cycle Synchronization written by Eric Monnet and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-03-08 with Business & Economics categories.
This paper assesses the strength of business cycle synchronization between 1950 and 2014 in a sample of 21 countries using a new quarterly dataset based on IMF archival data. Contrary to the common wisdom, we find that the globalization period is not associated with more output synchronization at the global level. The world business cycle was as strong during Bretton Woods (1950-1971) than during the Globalization period (1984-2006). Although globalization did not affect the average level of co-movement, trade and financial integration strongly affect the way countries co-move with the rest of the world. We find that financial integration de-synchronizes national outputs from the world cycle, although the magnitude of this effect depends crucially on the type of shocks hitting the world economy. This de-synchronizing effect has offset the synchronizing impact of other forces, such as increased trade integration.
Trade Integration And Business Cycle Synchronization
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Author : Mr.Romain A Duval
language : en
Publisher: International Monetary Fund
Release Date : 2014-04-03
Trade Integration And Business Cycle Synchronization written by Mr.Romain A Duval and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-04-03 with Business & Economics categories.
This paper reexamines the relationship between trade integration and business cycle synchronization (BCS) using new value-added trade data for 63 advanced and emerging economies during 1995–2012. In a panel framework, we identify a strong positive impact of trade intensity on BCS—conditional on various controls, global common shocks and country-pair heterogeneity—that is absent when gross trade data are used. That effect is bigger in crisis times, pointing to trade as an important crisis propagation mechanism. Bilateral intra-industry trade and trade specialization correlation also appear to increase co-movement, indicating that not only the intensity but also the type of trade matters. Finally, we show that dependence on Chinese final demand in value-added terms amplifies the international spillovers and synchronizing impact of growth shocks in China.
Globalization The Business Cycle And Macroeconomic Monitoring
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Author : Mr.Marco Terrones
language : en
Publisher: International Monetary Fund
Release Date : 2011-02-01
Globalization The Business Cycle And Macroeconomic Monitoring written by Mr.Marco Terrones and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-02-01 with Business & Economics categories.
We propose and implement a framework for characterizing and monitoring the global business cycle. Our framework utilizes high-frequency data, allows us to account for a potentially large amount of missing observations, and is designed to facilitate the updating of global activity estimates as data are released and revisions become available. We apply the framework to the G-7 countries and study various aspects of national and global business cycles, obtaining three main results. First, our measure of the global business cycle, the common G-7 real activity factor, explains a significant amount of cross-country variation and tracks the major global cyclical events of the past forty years. Second, the common G-7 factor and the idiosyncratic country factors play different roles at different times in shaping national economic activity. Finally, the degree of G-7 business cycle synchronization among country factors has changed over time.
Have National Business Cycles Become More Syncronized
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Author : Michael D. Bordo
language : en
Publisher:
Release Date : 2003
Have National Business Cycles Become More Syncronized written by Michael D. Bordo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with Business cycles categories.
"In this paper, we document evidence on the synchronization of business cycles across 16 countries over the past century and a quarter, demarcated into four exchange rate regimes. We find using three different methodologies that there is a secular trend towards increased synchronization for much of the twentieth century and that it occurs across diverse exchange rate regimes. This finding is in marked contrast to much of the recent literature, which has focused primarily on the evidence for the past 20 or 30 years and which has produced mixed results. We then considered a number of possible explanations for the observed pattern of increased synchronization. We first ascertained the role of shocks demarcated into country-specific (idiosyncratic) and global (common). Our key finding here is that global (common) shocks are the dominant influence across all regimes. The increasing importance of global shocks we posit reflects the forces of globalization, especially the integration of goods and services through international trade and the integration of financial markets. Our evidence shows a modest role for increasing bilateral trade in explaining synchronization, with stronger evidence for regional integration in Europe and North America but the evidence for the role of financial integration proxied by the removal of capital controls is inconclusive"--NBER website
Does International Trade Really Lead To Business Cycle Synchronization
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Author : Michael Artis
language : en
Publisher:
Release Date : 2011
Does International Trade Really Lead To Business Cycle Synchronization written by Michael Artis and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
Business Cycle Synchronization And Regional Integration
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Author : Norbert Fiess
language : en
Publisher: World Bank Publications
Release Date : 2005
Business Cycle Synchronization And Regional Integration written by Norbert Fiess and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Business Cycle categories.
Abstract: In early January 2003, the United States and Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua launched official negotiations for the Central American Free Trade Agreement (CAFTA), a treaty that would expand NAFTA-style trade barrier reductions to Central America. With deeper trade integration between Central America and the United States, it is expected that there will be closer links in business cycles between Central American countries and the United States. The paper finds a relatively low degree of business cycle synchronization within Central America as well as between Central America and the United States. The business cycle synchronization is expected to increase only modestly with further trade expansion, making the coordination of macroeconomic policies within CAFTA somewhat less of a priority.