Business Cycle Volatility and Openness: An Exploratory Cross-Section Analysis / Assaf Razin, Andrew Rose.

Format:

Book

Author/Creator:

Razin, Assaf.

Contributor:

National Bureau of Economic Research.

Rose, Andrew.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4208.

NBER working paper series no. w4208

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Business Cycle Volatility and Openness

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1992.

Summary:

This paper links business cycle volatility to barriers on international mobility of goods and capital. Theory predicts that capital market integration should lower consumption volatility while raising investment volatility, if most shocks are country-specific and transitory. The removal of barriers to trade in goods should enhance specialization and hence output volatility. We test these ideas using a unique panel data set which includes indicators of barriers to trade in both goods and capital flows. However, our empirical results indicate that neither the degree of capital mobility, nor the degree of goods mobility is strongly correlated with the volatility of consumption, investment or output. This may reflect the fact that many business cycle shocks are both persistent and common to many countries.

Notes:

Print version record

November 1992.