Trade, Production Sharing, and the International Transmission of Business Cycles

Ariel Burstein, Christopher Kurz and Linda Tesar ()

No 13731, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Countries that are more engaged in production sharing exhibit higher bilateral manufacturing output correlations. We use data on trade flows between US multinationals and their affiliates as well as trade between the United States and Mexican maquiladoras to measure production-sharing trade and its link with the business cycle. We then develop a quantitative model of international business cycles that generates a positive link between the extent of vertically integrated production-sharing trade and internationally synchronized business cycles. A key assumption in the model is a relatively low elasticity of substitution between home and foreign inputs in the production of the vertically integrated good.

JEL-codes: F4 F41 (search for similar items in EconPapers)
Date: 2008-01
New Economics Papers: this item is included in nep-bec, nep-cba, nep-dge and nep-int
Note: IFM ITI EFG
References: Add references at CitEc
Citations: View citations in EconPapers (196)

Published as Burstein, Ariel & Kurz, Christopher & Tesar, Linda, 2008. "Trade, production sharing, and the international transmission of business cycles," Journal of Monetary Economics, Elsevier, vol. 55(4), pages 775-795, May.

Downloads: (external link)
http://www.nber.org/papers/w13731.pdf (application/pdf)

Related works:
Journal Article: Trade, production sharing, and the international transmission of business cycles (2008)
Working Paper: Trade, Production Sharing and the International Transmission of Business Cycles (2005)
Working Paper: Trade, Production Sharing and the International Transmission of Business Cycles (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:13731

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w13731

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().