Journal Article

Has globalization increased the synchronicity of international business cycles?

Abstract: The inexorable rise in levels of interaction and interdependence among the nations of the world has, over the past several decades, caused their economies' business cycles to grow ever more synchronized. ; That is one finding that emerges from an examination of the chronologies of business cycle turning points, in 32 major economies, over a 40-year period. Author Travis Berge demonstrates these cycles have grown more synchronized as trade flows have expanded. ; However, although the trend does seem to be driven by trade linkages, it appears that financial linkages play little or no role. Countries with ever deepening trade relations see their business cycles increasingly aligned; but cross-border holdings of financial assets are not found to have a significant impact on business cycle synchronization.

Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Review

Publication Date: 2012

Volume: 97

Issue: Q III