Trade intensity and business cycle synchronization: East Asia versus Europe

Pradumna Bickram Rana, Tianyin Cheng and Wai-Mun Chia

Journal of Asian Economics, 2012, vol. 23, issue 6, 701-706

Abstract: This paper provides a comparative analysis of the relationship between trade intensities and synchronization of business cycles in East Asia and Europe (EU-15). It extends the work of Shin and Wang (2004, 2005) by providing a comparative perspective between East Asia and Europe. The paper finds that intra-industry trade, rather than inter-industry trade, is the major factor in explaining business cycle co-movements in both regions. The paper also supports the hypothesis that the relationship between trade intensity and output co-movement is stronger in East Asia than in Europe. The major policy implication of this finding is that East Asia needs to further strengthen macroeconomic policy coordination within the region.

Keywords: Economic integration; Trade intensity; Intra-industry trade; Business cycle synchronization; East Asia (search for similar items in EconPapers)
JEL-codes: F32 F36 F41 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:23:y:2012:i:6:p:701-706

DOI: 10.1016/j.asieco.2011.11.003

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