International Business Cycle Co-movement:Micro-level Mechanisms and Macro-level Channels
Amid increasingly connected global economic activities,academia and policymakers have given international business cycles co-movement significant attention.The spillover effects from global shocks and country-specific shocks and the underlying trans-mission channels have become the focus of academic research in recent years.This paper presents a systematic review of literature concerning the international transmission of business cycle.To start with,this paper outlines the performance of international bus-iness cycle co-movement and the driving factors behind the process.Then,this paper surveys the literature on the impact of be-tween trade,financial integration,FDI and global production network on international business cycle co-movement,hence pro-vides a summary of transmission channels from the macro perspective.Furthermore,this paper reviews how idiosyncratic shocks propagate internationally through multinational firms'internal capital market,internal supply chains and internal technology trans-fer,and explores the transmission mechanism from the micro perspective.Finally,this paper points out the inadequacy of existing research and proposed a set of areas for future research.
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