What is the relationship between international trade and business cycle synchronization? Using data from 40 countries, we find that GDP comovement is significantly associated with trade in intermediate inputs but not with trade in final goods. Motivated by this new fact, we build a model of...

The debate on the risks and benefits of the globalisation of international capital markets has focused on the volume and the volatility of the main capital flows ? foreign direct investment (FDI), portfolio investment, and foreign bank lending. Financial transfers in the form of worker...