Replication data for: Trade in Intermediate Inputs and Business Cycle Comovement

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Project Citation:

Johnson, Robert C. Replication data for: Trade in Intermediate Inputs and Business Cycle Comovement. Nashville, TN: American Economic Association [publisher], 2014. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E114310V1

Project Description

Summary: Does input trade synchronize business cycles across countries? I incorporate input trade into a dynamic multisector model with many countries, calibrate the model to match bilateral input-output data, and estimate trade-comovement regressions in simulated data. With correlated productivity shocks, the model yields high trade-comovement correlations for goods, but near-zero correlations for services and thus low aggregate correlations. With uncorrelated shocks, input trade generates more comovement in gross output than real value added. Goods comovement is higher when (i) the aggregate trade elasticity is low, (ii) inputs are more substitutable than final goods, and (iii) inputs are substitutable for primary factors.

Scope of Project

JEL Classification:
      E23 Macroeconomics: Production
      E32 Business Fluctuations; Cycles
      F11 Neoclassical Models of Trade
      F14 Empirical Studies of Trade
      F43 Economic Growth of Open Economies
      F44 International Business Cycles

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Published Versions

V1 [2019-10-12]

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