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Global Value Chain and Business Cycle Comovement: Does Distance Matter?
A salient feature of recent globalization is the emergence of global value chain, along which countries specialize in different positions. These difference of positions along the global production network may affect the business cycle comovement of two countries. Based on influence matrix derived from input-output linkage, a novel measure of distance is proposed to capture the heterogeneity between two countries in output response to country-specific technology shocks that propagate through global production network.
2020-08-26