Common trade exposure and business cycle comovement

• 成果类型: Article
• 署名作者: Avila-Montealegre, Oscar; Mix, Carter
• 署名单位: Banco de la Republica Colombia; Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2024.103998
• 发表日期: 2024
• 关键词: trade; business cycles; Open economy macroeconomics

摘要

Bilateral trade is considered a key driver of business-cycle transmission, as countries with higher bilateral trade have more correlated business cycles. We show, however, that when we account for the common trade exposure of a country pair to similar foreign cycles, the effect of bilateral trade on comovement falls sharply. Furthermore, common trade exposure is also a robust predictor of comovement. We conclude that trade is indeed a driver of business-cycle transmission, but often through common exposure to foreign cycles rather than just bilateral linkages. Finally, we consider the implications of these empirical results for the trade-comovement puzzle.