Business Cycle Co-movement and Trade Intensity in the Euro Area: is there a Dynamic Link?

Kappler, Marcus

doi:10.1515/jbnst-2011-0204

Cited by 6 publications

(8 citation statements)

References 33 publications

(35 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Comparing estimations over subperiods, Böwer and Guillemineau (2006), Jansen and Stokman (2011) and Keil and Sachs (2012) find that the relevance of trade linkages for bilateral synchronisation has decreased since the mid-nineties. New evidence on the dynamic relationship between synchronisation and trade intensity by Kappler (2011) casts doubt on the importance of trade in the transmission of cyclical shocks. His results support the common-shock view (see e.g.…”

Section: Literaturementioning

confidence: 99%

“…We measure bilateral synchronisation of business cycles ρ ijt as the negative absolute difference between two countries' real GDP growth rates following Giannone and Reichlin (2008), Kappler (2011) and Kalemli-Ozcan et al (2013):…”

Section: Business Cycle Synchronisation and Its Endogenous Determinantsmentioning

confidence: 99%

“…The latter are relevant for distinguishing the transmission of shocks through trade and FDI linkages from common shocks as a source of output cycle synchronisation (e.g. Kappler, 2011). Thus, panel estimations are much more capable of reconciling theory with empiricism than pure cross-sectional or pseudo panel estimation approaches.…”

Section: Introductionmentioning

confidence: 99%

“…Thus, panel estimations are much more capable of reconciling theory with empiricism than pure cross-sectional or pseudo panel estimation approaches. So far, genuine panel data is used by few studies only (see Kappler, 2011;Kalemli-Ozcan et al, 2013) which focus on one specific determinant of synchronisation.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Does Foreign Direct Investment Synchronise Business Cycles? Results from a Panel Approach

Fries

Kappler

2015

SSRN Journal

Self Cite

View full text Add to dashboard Cite

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. AbstractThis study readdresses the determinants of business cycle synchronisation. We test, on the one hand, whether FDI promoting policies may have consequences for the business cycle comovement between countries, and on the other hand, whether more plausible identification strategies change previous results. Our results suggest that linkages through foreign direct investment contribute in most cases positively to the synchronisation between country pairs. In contrast, the beneficial effects of trade integration for the similarity of business cycles are less robust and thus less important for the transmission of idiosyncratic shocks between countries than previously thought. Finally, we find that larger differences in the sector structure between two economies result in a bigger gap between their business cycles.JEL classification: F21, F41, F44, F49

show abstract

Section: Literaturementioning

confidence: 99%

Section: Business Cycle Synchronisation and Its Endogenous Determinantsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Does Foreign Direct Investment Synchronise Business Cycles? Results from a Panel Approach

Fries

Kappler

2015

SSRN Journal

Self Cite

View full text Add to dashboard Cite

show abstract

“…4 Kappler (2011) investigates the effects of trade linkages on business cycle transmission among the Euro zone countries using a cross-section augmented VAR model with unobserved common factor structure. The results indicate that the trade linkages have low explanatory power in the short-run while the common factor structure has high predictive power.…”

mentioning

confidence: 99%

Downside business confidence spillovers in Europe: evidence from causality-in-risk tests

Atukeren

Çevik

Korkmaz

2015

Journal of Economic Policy Reform

View full text Add to dashboard Cite

This paper employs Hong et al."s (2009) extreme risk spillovers test to investigate the bilateral business confidence spillovers between Greece, Italy, Spain, Portugal, France, and Germany.After controlling for domestic economic developments in each country and common international factors, downside risk spillovers are detected as a causal feedback between Spain and Portugal and unilaterally from Spain to Italy. Extremely low business sentiments in France, Germany, and Greece are mostly due to the common adverse economic environment and to each country"s own domestic economic developments.

show abstract

Determinants of co-movement and of lead and lag behavior of business cycles in the Eurozone

Duran

Ferreira-Lopes

2016

International Review of Applied Economics

View full text Add to dashboard Cite

In this paper we study business cycle correlations in the Eurozone and its determinants. Additionally, we also analyze the determinants of the lead and lag behavior of business cycles in the Eurozone. We explore the relevance, in the Eurozone context, using GDP and employment as the business cycle measures, of the determinants of business cycle synchronization identified in the literature, namely bilateral trade intensity, dissimilarity of labor market rigidity, dissimilarity in industrial structures, financial openness, and foreign direct investment relations. We estimate a simultaneous 4-equations model by Ordinary Least Squares (OLS) and three-stage least square to investigate empirically the above-mentioned determinants of business cycle correlation. Bilateral trade relations present a positive influence on business cycle correlations, while the dissimilarity of labor market rigidity presents a negative influence. The rest of the above-mentioned variables are non-significant. These results are robust to the use of the Hodrick-Prescott-filter and first differences as the de-trending methods, as well as the use of GDP as the business cycle measure, excluding the financial crisis years (2008 and 2009). Results for employment as the business cycle measure are in contrast with the previous ones, and found industrial dissimilarity to be the relevant variable to determine business cycles synchronization. In what concerns the determinants of the lead and lag behavior, results show that the member states of the Eurozone that usually lead the cycle are the ones that are wealthier, with strict employment legislation, more specialized in construction and finance sectors, and more prone to international capital movements. Differences in the determinants between contemporaneous business cycles and lead and lag behavior of business cycles are especially important for policy-makers in the Eurozone to know about, in particular if asymmetric shocks between countries are set in place.

show abstract

Business Cycle Co-movement and Trade Intensity in the Euro Area: is there a Dynamic Link?

Cited by 6 publications

References 33 publications

Does Foreign Direct Investment Synchronise Business Cycles? Results from a Panel Approach

Does Foreign Direct Investment Synchronise Business Cycles? Results from a Panel Approach

Downside business confidence spillovers in Europe: evidence from causality-in-risk tests

Determinants of co-movement and of lead and lag behavior of business cycles in the Eurozone

Contact Info

Product

Resources

About