Citation

Discussion Paper Details

Please find the details for DP11037 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Finance and Synchronization

Author(s): Ambrogio Cesa-Bianchi, Jean Imbs and Jumana Saleheen

Publication Date: January 2016

Keyword(s): Business Cycle Synchronization, Common Shocks, Contagion, Financial Linkages and Idiosyncratic Shocks

Programme Area(s): Financial Economics and International Macroeconomics and Finance

Abstract: It is well known that the bulk of international financial flows across countries are driven by common shocks. In response to these common shocks, we find that capital tends to flow systematically between the same types of countries, while the discrepancy between GDP growth rates widens. Thus, in the data synchronization falls when financial linkages rise, but only so in response to common shocks. In contrast, financial linkages tend to increase the synchronization of business cycles in response to purely country-specific shocks.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=11037

Bibliographic Reference

Cesa-Bianchi, A, Imbs, J and Saleheen, J. 2016. 'Finance and Synchronization'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=11037