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DOES INTERNATIONAL TRADE REALLY LEAD TO BUSINESS CYCLE SYNCHRONIZATION?—A PANEL DATA APPROACH *
Author(s) -
ARTIS MICHAEL,
OKUBO TOSHIHIRO
Publication year - 2011
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2011.02238.x
Subject(s) - business cycle , economics , overtime , currency , globalization , synchronization (alternating current) , panel data , economic integration , monetary economics , index (typography) , international economics , positive correlation , international trade , macroeconomics , econometrics , market economy , labour economics , engineering , telecommunications , computer science , channel (broadcasting) , world wide web , medicine
In this paper we re‐estimate the correlation between trade and business cycle synchronization. Different from other previous studies, we use long‐run GDP and trade data and use the GDP cross‐correlation index à la Cerqueira and Martins ( Economics Letters , Vol. 102 (2009), pp. 106–108) rather than overtime cross‐correlations. We find a positive impact of trade on business cycle synchronization particularly in the current wave of globalization, although the interwar period sees negative impacts. The current economic integration and currency unions also positively affect business cycle synchronization.