Vertical Specialization and International Business Cycle Synchronization

Ananth Ramanarayanan () and Costas Arkolakis

No 780, 2009 Meeting Papers from Society for Economic Dynamics

Abstract: We explore the impact of vertical specialization - trade in goods across multiple stages of production - on the relationship between trade and international business cycle synchronization. We develop a model in which the degree of vertical specialization is endogenously determined by comparative advantage across heterogeneous goods and varies with trade barriers between countries. We show analytically that fluctuations in measured productivity in our model are not linked across countries through trade, despite the greater transmission of technology shocks implied by higher degrees of vertical specialization. In numerical simulations, we find this transmission is insufficient in generating substantial dependence of business cycle synchronization on trade intensity.

Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (55)

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2009/paper_780.pdf (application/pdf)

Related works:
Journal Article: Vertical Specialization and International Business Cycle Synchronization (2009)
Working Paper: Vertical specialization and international business cycle synchronization (2008)
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:red:sed009:780

Access Statistics for this paper

More papers in 2009 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().