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Trade Intensity And Business Cycle Synchronization: The Case Of East Asian Countries

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  • PRADUMNA B. RANA

    (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore)

Abstract

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

Suggested Citation

  • Pradumna B. Rana, 2008. "Trade Intensity And Business Cycle Synchronization: The Case Of East Asian Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 53(02), pages 279-292.
    • Handle: RePEc:wsi:serxxx:v:53:y:2008:i:02:n:s021759080800294x
    DOI: 10.1142/S021759080800294X
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    References listed on IDEAS

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    1. Calderon, Cesar & Chong, Alberto & Stein, Ernesto, 2007. "Trade intensity and business cycle synchronization: Are developing countries any different?," Journal of International Economics, Elsevier, vol. 71(1), pages 2-21, March.
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    5. Jean IMBS, 1998. "Fluctuations, Bilateral Trade and the Exchange Rate Regime," Cahiers de Recherches Economiques du Département d'économie 9906, Université de Lausanne, Faculté des HEC, Département d’économie, revised Nov 1998.
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    Cited by:

    1. Hideaki Hirata & M. Ayhan Kose & Chris Otrok, "undated". "Regionalization vs. Globalization," Working Paper 164456, Harvard University OpenScholar.
    2. Shruthi Jayaram, 2009. "Examining the Decoupling Hypothesis for India," Working Papers id:2119, eSocialSciences.
    3. Rana, Pradumna Bickram & Cheng, Tianyin & Chia, Wai-Mun, 2012. "Trade intensity and business cycle synchronization: East Asia versus Europe," Journal of Asian Economics, Elsevier, vol. 23(6), pages 701-706.
    4. Chunjiao Yu & Ren Zhang & Lian An & Zhixing Yu, 2020. "Has China’s Belt and Road Initiative Intensified Bilateral Trade Links between China and the Involved Countries?," Sustainability, MDPI, vol. 12(17), pages 1-19, August.
    5. Yu, Chunjiao & Zhao, Jiaqi & Cheng, Shixiong, 2023. "GVC trade and business cycle synchronization between China and belt-road countries," Economic Modelling, Elsevier, vol. 126(C).
    6. Krzysztof Beck, 2022. "Macroeconomic policy coordination and the European business cycle: Accounting for model uncertainty and reverse causality," Bulletin of Economic Research, Wiley Blackwell, vol. 74(4), pages 1095-1114, October.

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