Business Cycle Synchronisation and Economic Integration

Business Cycle Synchronisation and Economic Integration
Author: Marcus Kappler
Publisher: Springer Science & Business Media
Total Pages: 197
Release: 2012-07-30
Genre: Business & Economics
ISBN: 3790828556

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This book offers the reader a state-of-the-art overview on theory and empirics of business cycle synchronisation, structural reform and economic integration. Focusing on the ongoing integration process in the euro area and the EU, it analyses the integration process that has taken place since the 1980s and which is marked by the advent of the euro and the substantial enlargement that resulted from the accession of 12 new Member States in East and Southern Europe.

Has Globalization Really Increased Business Cycle Synchronization?

Has Globalization Really Increased Business Cycle Synchronization?
Author: Eric Monnet
Publisher: International Monetary Fund
Total Pages: 55
Release: 2016-03-08
Genre: Business & Economics
ISBN: 1513564897

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This paper assesses the strength of business cycle synchronization between 1950 and 2014 in a sample of 21 countries using a new quarterly dataset based on IMF archival data. Contrary to the common wisdom, we find that the globalization period is not associated with more output synchronization at the global level. The world business cycle was as strong during Bretton Woods (1950-1971) than during the Globalization period (1984-2006). Although globalization did not affect the average level of co-movement, trade and financial integration strongly affect the way countries co-move with the rest of the world. We find that financial integration de-synchronizes national outputs from the world cycle, although the magnitude of this effect depends crucially on the type of shocks hitting the world economy. This de-synchronizing effect has offset the synchronizing impact of other forces, such as increased trade integration.

International Trade and Business Cycle Synchronization in Poland, the European Union and the Euro Zone

International Trade and Business Cycle Synchronization in Poland, the European Union and the Euro Zone
Author: Piotr Misztal
Publisher:
Total Pages: 0
Release: 2013
Genre:
ISBN:

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The analysis of business cycle synchronization levels has become a key point in the discussion of the processes of international economic integration. Economists show a particular interest in analyzing the frequency of processes of business cycle convergence and divergence (decoupling) in the European Union, especially in the Euro Zone. One of the factors determining business cycle convergence in economies is the intensity and structure of international trade. The aim of this paper is to analyze the influence exerted by international trade over the synchronization of business cycles in Poland, the European Union and the Euro Zone from 1995 to 2011. The analytical methods employed here encompass a review of the literature on macroeconomics and international finance, as well as econometric models (such as the Vector Autoregression Model). The results of empirical research indicate that an increase in trade turnover does not necessarily lead to greater business cycle synchronization in the economies under analysis. In fact, the impact of an increase in countries' turnover on the synchronization of their business cycles depends predominantly on the structure of trade turnover and not solely on the intensity of trade.

Business Cycles Syncronaziation in Europe

Business Cycles Syncronaziation in Europe
Author: Silvia Palasca
Publisher: GRIN Verlag
Total Pages: 15
Release: 2013-06-05
Genre: Business & Economics
ISBN: 3656443033

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Essay from the year 2013 in the subject Economics - Monetary theory and policy, Alexandru Ioan Cuza University of Iasi, language: English, abstract: The European Union sets the premises for the appearance of a new phenomenon in the global economic setting: the synchronization of the national business cycles. The aim of this article is to statistically prove the existence of a Euro are business cycle through the study of a classic indicator- the annual change of the GDP and also through the use of foreign trade indicators-the annual changes in exports in imports. Also, it is important, at the end, to choose the best of these indicators or a combination thereof to use as a benchmark for further studies. The empiric study is useful to classify the European countries in clusters according to synchronization, a first step in adopting common policies.

Trade Integration and Business Cycle Synchronization

Trade Integration and Business Cycle Synchronization
Author: Mr.Romain A Duval
Publisher: International Monetary Fund
Total Pages: 46
Release: 2014-04-03
Genre: Business & Economics
ISBN: 1475523599

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This paper reexamines the relationship between trade integration and business cycle synchronization (BCS) using new value-added trade data for 63 advanced and emerging economies during 1995–2012. In a panel framework, we identify a strong positive impact of trade intensity on BCS—conditional on various controls, global common shocks and country-pair heterogeneity—that is absent when gross trade data are used. That effect is bigger in crisis times, pointing to trade as an important crisis propagation mechanism. Bilateral intra-industry trade and trade specialization correlation also appear to increase co-movement, indicating that not only the intensity but also the type of trade matters. Finally, we show that dependence on Chinese final demand in value-added terms amplifies the international spillovers and synchronizing impact of growth shocks in China.

Essays on Value Added Trade and Business Cycle Synchronization

Essays on Value Added Trade and Business Cycle Synchronization
Author: Christian Isaac Darfah
Publisher:
Total Pages: 244
Release: 2021
Genre: Business
ISBN:

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The literature on nexus between trade and business cycle synchronization have provided mixed and weak evidence of the effect of trade on business cycle synchronization as a result of lack of value-added bilateral trade data which provides solution for overestimation or underestimation of shock exposure when using gross trade data. Also, due to limited data on sectoral bilateral value-added trade, the literature has not been able to pinpoint the sectors where synchronization is necessary in order to economically direct all effort to these sectors in forging economic integration. The paper uses value-added trade data to examine the impact of trade on business cycle synchronization at the aggregate level and sector level and find a highly significant and highly positive effect of trade on the aggregate level. Estimates for agriculture, manufacturing, construction, total business, electricity gas and sewer, and other service sectors yield a positive significant effect in the service sector, indicating that attention should be focus on the service and business sector when integrating economically. In this paper we examine output cycle synchronization patterns of the countries that joined the Eurozone later and countries that are in preparation or committed to join in relation to the original Eurozone members. We analysis this in the contest of before, during and recovery periods of the global financial crisis investigate the differences in the patterns of synchronization for late and future members of the Eurozone. For more understanding, we examine the pattern on disaggregate level using data for agricultural, manufacturing, construction, utility, total business and other services sectors from 1995-2015. Also, we examine the importance of trade on output synchronization both on the aggregate and disaggregate level using System GMM which not only solves the problem of endogeneity, but it estimates the persistence of business cycle synchronization efficiently. The result provides evidence of a positive persistence; however, synchronization pattern differs between late and future member states. Also, the financial crisis had a negative effect on synchronization in the European sub region as result the difference in the response by member states. The result shows a weak evidence of the importance of trade as a channel of synchronization. Even though previous studies have provided evidence improvement in UK and the Eurozone output comovement, Brexit came to pass. This has questioned the potency of the Enlargement of the Eurozone Initiative. This paper reexamines the degree of business cycle synchronization between the Euro area countries and United Kingdom in attempt to find an economic reason for Brexit. We also examine if the disaggregate economy have share similar pattern as the aggregated economy using the output synchronization in the agricultural, manufacturing, constructions, utility, total business and other service sectors between the euro area countries and United Kingdom. Using valued-added trade data between 1995 and 2015 from WTO-TiVA database we further examine effect of trade (sectoral trade) on the output (sectoral output) synchronization. Furthermore, we analyze the same questions in the contest of before and after the global financial crisis. The result show that the UK-EMU trade channel is no important to the output cycles synchronization. Also, due the unstable pattern or persistence of UK-EMU synchronization the EMU will have little effect from the Brexit if there exit one.