China's Emergence in the World Economy and Business Cycles in Latin America

By A. Cesa-Bianchi, M. Pesaran, Alessandro Rebucci, TengTeng Xu. Social Science Research Network, 2011

150 citations recorded by the source corpus.

This paper investigates how changes in trade linkages between China, Latin America, and the rest of the world have altered the transmission of international business cycles to Latin America. Evidence based on a GVAR model for five large Latin American economies shows that the long-term impact of a China GDP shock on the typical Latin American economy has increased by three times since the mid-1990s, while the long-term impact of a US GDP shock has halved, while the transmission of shocks to Latin America and the rest of emerging Asia GDP (excluding China and India) has not changed. These changes owe more changes in China’s impact on Latin America’s traditional and largest trading partners than to increased direct bilateral trade linkages boosted by the decade-long commodity price boom. These findings have important implications for both Latin America and the international business cycle.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/9f0148fc64f6c659d2869d9fe0a5b3d40729b186

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Citations in the corpus

Determinants of Global Spillovers from US Monetary Policy (2015, background): “…”as a whole [in order to avoid] being subject to possible inconsistencies that could arise if the different economies in the euro area were modelled separately” (see Dées et al., 2007, p. 2), see also Eickmeier and Ng (2011); Cashin et al. (2012); Rebucci et al. (2012); Chudik and Smith (2013).”
Sharing a Ride on the Commodities Roller Coaster: Common Factors in Business Cycles of Emerging Economies (2015, background): “Formally, we assume that Sjt is defined as Sjt = z R jt { exp [ Ωj,u(Dj,t −Dj) ] − 1 } (19)”