Trade and Business Cycle Correlations in Asia-Pacific

Kumakura Masanaga

No 44, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: Recent empirical studies challenge the traditional theory of optimum currency areas by arguing that a monetary union enhances trade and business cycle co-movements among its member countries sufficiently as to obviate the need for national monetary policy. This paper examines the empirical relationship between trade and business cycle correlations among thirteen Asia-Pacific countries, paying particular attention to the structural characteristics of their economies and other issues not explored fully in the literature. According to our result, although trade is relevant to the business cycles of individual countries, the main determinant of their international correlations is not the geographical structure of their trade but what they produce and export --more specifically the extent to which their output and exports are concentrated on electronic products.

Keywords: Business cycles; Optimum currency area; Trade; Electronics; Trade problem; Monetary policy; Asia; Oceania; 景気; 貿易; エレクトロニクス; 貿易問題; 金融政策; アジア; オセアニア (search for similar items in EconPapers)
JEL-codes: F15 F33 F40 (search for similar items in EconPapers)
Date: 2005-12-01
New Economics Papers: this item is included in nep-int, nep-mac and nep-sea
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Citations: View citations in EconPapers (2)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 44. 2005-12-01

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