Business cycle synchronisation: disentangling trade and financial linkages
Stephane Dees and
Nico Zorell
No 1322, Working Paper Series from European Central Bank
Abstract:
Drawing on a large sample of countries, this paper explores whether closer economic ties between countries foster business cycle synchronisation and disentangles the role of the various channels, including trade and financial linkages as well as the similarity in sectoral specialisation. Overall, our results confirm that trade integration fosters business cycle synchronisation. Similar patterns of sectoral specialisation also lead to closer business cycle co-movement. By contrast, it remains difficult to find a direct relationship between bilateral financial linkages and output correlation. However, our results suggest that financial integration affects business cycle synchronisation indirectly by raising the similarity in sectoral specialisation. Through this indirect link, financial integration tends to raise business cycle comovement between countries. JEL Classification: E32, F41, E44
Keywords: financial integration; international business cycle; international transmission of shocks (search for similar items in EconPapers)
Date: 2011-04
New Economics Papers: this item is included in nep-bec, nep-ifn, nep-mac and nep-opm
Note: 2544114
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)
Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp1322.pdf (application/pdf)
Related works:
Journal Article: Business Cycle Synchronisation: Disentangling Trade and Financial Linkages (2012) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20111322
Access Statistics for this paper
More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().