Trade, Specialization and Cycle Synchronization : Explaining Output Comovement between Latin America, China and India
The main goal of the present paper is to explain whether trade and output specialization patterns may help explain the evolution of output co-movement of Latin American countries China and India. Using a sample of 147 countries over the period 1965-2004 we update and extend the results in Calderon, Chong and Stein (2006) to show that higher trade intensity (especially more extensive intra-industry trade links) and more symmetric structures of production (as well as of exports and imports) may lead to more synchronous cycles. For the Latin America and the Caribbean (LAC) region as a whole, the model predicts fairly well the changes in output comovement of LAC countries China and India (more than 50 percent). However, the performance of the model across countries shows a wide variation.
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| Format: | Working Paper biblioteca |
| Language: | English English |
| Published: |
World Bank, Washington, DC
2007-07
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| Subjects: | IMPACT OF TRADE INTEGRATION, BILATERAL TRADE, BUSINESS CYCLE SYNCHRONIZATION, CRUDE OIL PRICE, REGRESSION ANALYSIS, INCREASING SPECIALIZATION, PREDICTED CHANGE, |
| Online Access: | http://documents.worldbank.org/curated/en/514601468327000025/Trade-specialization-and-cycle-synchronization-explaining-output-comovement-between-Latin-America-China-and-India http://hdl.handle.net/10986/36114 |
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| Summary: | The main goal of the present paper is to
explain whether trade and output specialization patterns may
help explain the evolution of output co-movement of Latin
American countries China and India. Using a sample of 147
countries over the period 1965-2004 we update and extend the
results in Calderon, Chong and Stein (2006) to show that
higher trade intensity (especially more extensive
intra-industry trade links) and more symmetric structures of
production (as well as of exports and imports) may lead to
more synchronous cycles. For the Latin America and the Caribbean
(LAC) region as a whole, the model predicts fairly well the
changes in output comovement of LAC countries China and
India (more than 50 percent). However, the performance of
the model across countries shows a wide variation. |
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