Trade Intensity and Business Cycle Synchronization: The Case of East Asia

Pradumna B. Rana ()
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Pradumna B. Rana: Asian Development Bank, Postal: 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines,

No 10, Working Papers on Regional Economic Integration from Asian Development Bank

Abstract: This paper examines whether increasing trade intensity among East Asian countries has led to a synchronization of business cycles. It extends the work of Shin and Wang (2004) in two ways: by (i) improving the specification of their business cycle correlation equation, and (ii) extending the sample to cover the period after the Asian financial crisis. The study finds that intra-industry trade, rather than inter-industry trade, is the major factor explaining business cycle co-movements in East Asia, with important implications for the prospects for a single currency in the region.

Keywords: economic integration; trade intensity; intra-industry trade; business cycle synchronization; East Asia (search for similar items in EconPapers)
JEL-codes: F15 F42 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2007-06-01
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbrei:0010

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