{
  "title": "Trade, Finance, Specialization, and Synchronization",
  "publication": "IMF Working Papers, April 1, 2003",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/trade-finance-specialization-and-synchronization-16431",
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  "summary": "The paper investigates the determinants of business cycles synchronization across regions. It uses both international and intranational data to evaluate the linkages between trade in goods, trade in financial assets, specialization and business cycles synchronization using a system of simultaneous e",
  "sections": [
    {
      "heading": "Methodology",
      "content": "- Uses both international and intranational data.\n- Employs a system of simultaneous equations to evaluate linkages between:\n  - trade in goods,\n  - trade in financial assets,\n  - specialization, and\n  - business cycle synchronization."
    },
    {
      "heading": "Key findings",
      "content": "- Simultaneity:\n  - Simultaneity is important, as both trade and financial openness have a direct and an indirect effect on cycle synchronization.\n- Financial integration:\n  - A variety of alternative measures of financial integration suggest that regions with strong financial links are significantly more synchronized, though they are also more specialized.\n- Specialization:\n  - Specialization patterns have a sizable effect on business cycles, beyond their reflection of intra-industry trade, and of openness to goods and assets trade.\n- Trade role:\n  - The estimated role of trade is in line with existing models once intra-industry trade is controlled for.\n- Theoretical and empirical link:\n  - Results relate to a recent strand of international business cycle models with incomplete markets and transport costs.\n  - Empirically, results point to an important omission in the usual criteria defining an optimal currency area, namely specialization patterns."
    },
    {
      "heading": "Subjects and keywords (as listed)",
      "content": "- Subjects: Balance of payments, Business cycles, Capital account, Capital flows, Economic growth, Financial integration, Financial markets, International trade, Plurilateral trade\n- Keywords: Africa, Business cycles, business cycles correlation, business cycles synchronization, Capital account, Capital flows, correlation coefficient, cross-state trade flow, economic structure, Financial integration, financial openness, industry trade, international business cycle, least squares, optimal currency area, Plurilateral trade, specialization, Trade, WP\n\n---\n\n Content in this bundle\n\n- Trade, Finance, Specialization, and Synchronization - WP/03/81\n  - Trade, Finance, Specialization, and Synchronization - WP/03/81 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Trade, Finance, Specialization, and Synchronization - WP/03/81 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/trade-finance-specialization-and-synchronization-16431"
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    "Authors: Jean Imbs",
    "Published: April 1, 2003",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451850383.001",
    "Uses both international and intranational data.",
    "Employs a system of simultaneous equations to evaluate linkages between:",
    "Simultaneity:",
    "Financial integration:",
    "Specialization:",
    "Trade role:",
    "Theoretical and empirical link:",
    "Subjects: Balance of payments, Business cycles, Capital account, Capital flows, Economic growth, Financial integration, Financial markets, International trade, Plurilateral trade",
    "Keywords: Africa, Business cycles, business cycles correlation, business cycles synchronization, Capital account, Capital flows, correlation coefficient, cross-state trade flow, economic structure, Financial integration, financial openness, industry trade, international business cycle, least squares, optimal currency area, Plurilateral trade, specialization, Trade, WP",
    "**Trade, Finance, Specialization, and Synchronization - WP/03/81**"
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