Arbeitspapier
Trade, finance or policies: what drives the cross-border spill-over of business cycles?
In this paper we investigate how income growth rates in one country are affected by growth rates in partner countries, testing for the importance of pairwise country links as well as characteristics of the receiving country (trade and financial openness, exchange rate regime, fiscal variables). We find that trade integration fosters the spill-over of business cycles, both bilaterally and as a country characteristic (trade openness). Results for financial integration are mixed; financial links as pairwise country characteristic are either insignificant or negatively signed (indicating a dampening of cross country spill-overs), but financial openness as characteristic of the receiving country amplifies spill-overs. We find no evidence for a role of the exchange rate regime. Finally, we find that higher government spending and debt reduces countries’ vulnerability to foreign business cycles, presumably through the effect of automatic stabilisers.
- ISBN
-
978-92-899-2714-7
- Sprache
-
Englisch
- Erschienen in
-
Series: ECB Working Paper ; No. 1993
- Klassifikation
-
Wirtschaft
Open Economy Macroeconomics
International Business Cycles
- Thema
-
FDI
financial integration
gravity
growth spillovers
multi-country models
trade integration
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Montinari, Letizia
Stracca, Livio
- Ereignis
-
Veröffentlichung
- (wer)
-
European Central Bank (ECB)
- (wo)
-
Frankfurt a. M.
- (wann)
-
2017
- DOI
-
doi:10.2866/003067
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Montinari, Letizia
- Stracca, Livio
- European Central Bank (ECB)
Entstanden
- 2017
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