This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Journal: Macroeconomics: Vol. 2 No. 2 (April 2010)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Macro - All Issues

AEJ: Macro Forthcoming Articles

Putting the Parts Together: Trade, Vertical Linkages, and Business Cycle Comovement

Article Citation

di Giovanni, Julian, and Andrei A. Levchenko. 2010. "Putting the Parts Together: Trade, Vertical Linkages, and Business Cycle Comovement." American Economic Journal: Macroeconomics, 2(2): 95-124.

DOI: 10.1257/mac.2.2.95

Abstract

Countries that trade more with each other exhibit higher business cycle correlation. This paper examines the mechanisms underlying this relationship using a large cross-country, industry-level panel dataset of manufacturing production and trade. We show that sector pairs that experience more bilateral trade exhibit stronger comovement. Vertical linkages in production are an important explanation behind this effect: bilateral international trade increases comovement significantly more in cross-border industry pairs that use each other as intermediate inputs. Our estimates imply that these vertical production linkages account for some 30 percent of the total impact of bilateral trade on the business cycle correlation. (JEL E32, F14, F43)

Article Full-Text Access

Full-text Article

Additional Materials

Download Data Set (38.63 MB) | Appendix (120.89 KB)

Authors

di Giovanni, Julian (IMF)
Levchenko, Andrei A. (U MI)

JEL Classifications

E32: Business Fluctuations; Cycles
F14: Country and Industry Studies of Trade
F43: Economic Growth of Open Economies

Comments

View Comments on This Article (0) | Login to post a comment


American Economic Journal: Macroeconomics


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Macro - All Issues

AEJ: Macro - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us