Regionalization vs. Globalization

By Hideaki Hirata, Ayhan Kose, Christopher Otrok

January 22, 2013

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Format: Chicago

Hideaki Hirata, Ayhan Kose, and Christopher Otrok. Regionalization vs. Globalization, (USA: International Monetary Fund, 2013) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Abstract: Both global and regional economic linkages have strengthened substantially over the past quarter century. We employ a dynamic factor model to analyze the implications of these linkages for the evolution of global and regional business cycles. Our model allows us to assess the roles played by the global, regional, and country-specific factors in explaining business cycles in a large sample of countries and regions over the period 1960–2010. We find that, since the mid-1980s, the importance of regional factors has increased markedly in explaining business cycles especially in regions that experienced a sharp growth in intra-regional trade and financial flows. By contrast, the relative importance of the global factor has declined over the same period. In short, the recent era of globalization has witnessed the emergence of regional business cycles.

Subject: Business cycles, Consumption, Econometric analysis, Economic growth, Factor models, Globalization, International trade, National accounts, Trade balance

Keywords: Asia and Pacific, Business cycle comovement, Business cycle correlation, Business cycle synchronization, Business cycles, Comovement, Consumption, Europe, Factor loading, Factor models, Financial linkages, Global, Global factor, North Africa, North America, Regional factor, Synchronization, Trade balance, Trade linkages, Variance share, World business cycle, WP

Publication Details

Pages:

65
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/019
Stock No:

WPIEA2013019
ISBN:

9781557753281
ISSN:

1018-5941

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