China in the World Economy: Dynamic Correlation Analysis of Business Cycles

Author
Jarko Fidrmuc, Ivana Bátorová
Content Type
Working Paper
Institution
United Nations University
Abstract
We analyse the business cycles in China and in selected OECD countries between 1992 and 2006. We show that, although negative correlation dominate s for nearly all countries, we can also see large differences for various frequencies of cyclical developments. On the one hand, nearly all OE CD countries show positive correlations of the very short-run developments that may correspond to intensive supplier linkages. On the other hand, business cycle frequencies (cycles with periods between 1.5 and 8 years) are typically negative. Nevertheless, countries facing a comparably longer history of intensive trading links tend to show also slightly higher correlations of business cycles with China.
Topic
Economics, International Trade and Finance
Political Geography
China, Asia