Countries that trade more with each other exhibit higher business cycle correlation. This paper examines the mechanisms underlying this relationship using a large cross-country industry-level panel dataset of manufacturing production and trade. We show that sector pairs that experience more...

Background: This paper measures the aggregate trade costs from 2000 to 2013, and dicusses the impact of China’s aggregate trade costs on comparative advantages and export share of 17 two-digit ISIC manufacturing industries. Methods: This paper takes China’s vertical specialization reality...