BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 7/2008:
China in the world economy: Dynamic correlation analysis of business cycles
Jarko Fidrmuc, Iikka Korhonen ()
and Ivana Bátorová
Abstract: 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 hort-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.
Keywords: business cycles; synchronization; trade; FDI; dynamic correlation; (follow links to similar papers)
JEL-Codes: E32; F15; F41; (follow links to similar papers)
24 pages, June 17, 2008
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