Does International Trade Really Lead to Business Cycle Synchronization? A Panel Data Approach

15 Pages Posted: 1 Mar 2011

See all articles by Michael J. Artis

Michael J. Artis

University of Manchester - Institute for Political & Economic Governance (IPEG)

Toshihiro Okubo

University of Geneva - Graduate Institute of International Studies (HEI)

Abstract

In this paper we re-estimate the correlation between trade and business cycle synchronization. Different from other previous studies, we use long-run GDP and trade data and use the GDP cross-correlation index la Cerqueira and Martins (Economics Letters, Vol. 102 (2009), pp. 106-108) rather than overtime cross-correlations. We find a positive impact of trade on business cycle synchronization particularly in the current wave of globalization, although the interwar period sees negative impacts. The current economic integration and currency unions also positively affect business cycle synchronization.

Suggested Citation

Artis, Michael J. and Okubo, Toshihiro, Does International Trade Really Lead to Business Cycle Synchronization? A Panel Data Approach. The Manchester School, Vol. 79, No. 2, pp. 318-332, 2011, Available at SSRN: https://ssrn.com/abstract=1773241 or http://dx.doi.org/10.1111/j.1467-9957.2011.02238.x

Michael J. Artis

University of Manchester - Institute for Political & Economic Governance (IPEG) ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom

Toshihiro Okubo

University of Geneva - Graduate Institute of International Studies (HEI) ( email )

PO Box 136
Geneva, CH-1211
Switzerland
+41 22 908 5900 (Phone)

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