China in the world economy : dynamic correlation analysis of business cycles
Fidrmuc, Jarko; Korhonen, Iikka; Bátorová, Ivana (15.06.2008)
JulkaisusarjaBOFIT Discussion Papers
JulkaisijaBank of Finland
Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi:bof-201408071932
We analyze the business cycles in China and in selected OECD countries between 1992 and 2006 using dynamic correlations. Nearly all OECD countries showpositive correlations of the very short-run developments which may correspond to intensive supplier linkages. However, dynamic correlations at the business cycle frequencies are negative. Countries facing a comparably longer history of intensive trading links tend to show slightly higher correlations of business cycles with China. Even though trade and financial flows do not really increase correlations of business cycles between China and OECD countries, they lower the degree of business cycle synchronization within the OECD area. JEL Classification: E32, F15, F41. Keywords: Business cycles, synchronization, trade, FDI, dynamic correlation.
Published in CESifo Economic Studies, Vol. 59, 2/2013, 392-411 and Hitotsubashi University; The Institute of Economic Research; Reprint 9-2011.