TY  - JOUR
AU  - Baxter,Marianne
AU  - Kouparitsas,Michael A.
TI  - Determinants of Business Cycle Comovement: A Robust Analysis
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10725
PY  - 2004
Y2  - September 2004
UR  - http://www.nber.org/papers/w10725
L1  - http://www.nber.org/papers/w10725.pdf
N1  - Author contact info:
Marianne Baxter
Department of Economics
Boston University
270 Bay State Road
Boston, MA  02215
Tel: 617/353-2417
Fax: 617/353-4449
E-Mail: mbaxter@bu.edu
AB  - This paper investigates the determinants of business cycle comovement between countries. Our dataset includes over 100 countries, both developed and developing. We search for variables that are  robust' in explaining comovement, using the approach of Leamer (1983). Variables considered are (i) bilateral trade between countries; (ii) total trade in each country; (iii) sectoral structure; (iv) similarity in export and import baskets; (v) factor endowments; and (vi) gravity variables. We find that bilateral trade is robust. However, two variables that the literature has argued are important for business cycles   industrial structure and currency unions   are found not to be robust.
ER  -