How Does Globalization Affect the Synchronization of Business Cycles? /

This paper examines the impact of rising trade and financial integration on international business cycle comovement among a large group of industrial and developing countries. The results provide at best limited support for the conventional wisdom that globalization has increased the degree of synch...

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Bibliographic Details
Main Author: Kose, Ayhan
Other Authors: Prasad, Eswar, Terrones, Marco
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2003.
Series:IMF Working Papers; Working Paper ; No. 2003/027
Online Access:Full text available on IMF
Description
Summary:This paper examines the impact of rising trade and financial integration on international business cycle comovement among a large group of industrial and developing countries. The results provide at best limited support for the conventional wisdom that globalization has increased the degree of synchronization of business cycles. The evidence that trade and financial integration enhance global spillovers of macroeconomic fluctuations is stronger for industrial countries. One striking result is that, on average, cross-country consumption correlations have not increased in the 1990s, precisely when financial integration would have been expected to result in better risk-sharing opportunities, especially for developing countries.
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Physical Description:1 online resource (14 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students