Trade in Intermediate Inputs and Business Cycle Comovement
Robert Johnson ()
American Economic Journal: Macroeconomics, 2014, vol. 6, issue 4, 39-83
Does input trade synchronize business cycles across countries? I incorporate input trade into a dynamic multisector model with many countries, calibrate the model to match bilateral input-output data, and estimate trade-comovement regressions in simulated data. With correlated productivity shocks, the model yields high trade-comovement correlations for goods, but near-zero correlations for services and thus low aggregate correlations. With uncorrelated shocks, input trade generates more comovement in gross output than real value added. Goods comovement is higher when (i) the aggregate trade elasticity is low, (ii) inputs are more substitutable than final goods, and (iii) inputs are substitutable for primary factors.
JEL-codes: E23 E32 F11 F14 F43 F44 (search for similar items in EconPapers)
Note: DOI: 10.1257/mac.6.4.39
References: Add references at CitEc
Citations: View citations in EconPapers (113) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to AEA members and institutional subscribers.
Working Paper: Trade in Intermediate Inputs and Business Cycle Comovement (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:aea:aejmac:v:6:y:2014:i:4:p:39-83
Ordering information: This journal article can be ordered from
Access Statistics for this article
American Economic Journal: Macroeconomics is currently edited by Simon Gilchrist
More articles in American Economic Journal: Macroeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().