Trade intensity and business cycle synchronization : the case of East Asia

Pradumna B. Rana

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

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Year of publication:	2007
Authors:	Rana, Pradumna Bickram
Publisher:	Manila, Philippines : Asian Development Bank
Subject:	economic integration \| trade intensity \| intra-industry trade \| business cycle synchronization \| East Asia \| Ostasien \| Konjunkturzusammenhang \| Business cycle synchronization \| Intraindustrieller Handel \| Intra-industry trade \| Regionale Wirtschaftsintegration \| Regional economic integration \| Wirtschaftsintegration \| Economic integration \| Internationale Wirtschaft \| International economy \| Internationale Wirtschaftsbeziehungen \| International economic relations