领域：学术论文 · 社会科学

Bilateral trade is considered a key driver of business-cycle transmission, as countries with higher bilateral trade have more correlated business cycles. We show, however, that when we account for the common trade exposure of a country pair to similar foreign cycles, the effect of bilateral trade on comovement falls sharply. Furthermore, common trade exposure is also a robust predictor of comovement. We conclude that trade is indeed a driver of business-cycle transmission, but often through common exposure to foreign cycles rather than just bilateral linkages. Finally, we consider the implications of these empirical results for the ‘‘trade-comovement puzzle.’’
A large literature, starting with Frankel and Rose (1998), argues that bilateral trade is a key driver of business-cycle transmission, as countries that trade more with each other have more correlated business cycles—a phenomenon known as trade comovement.
We show that previous estimates of trade comovement are upward biased because they omit the common exposure of a country pair to similar foreign cycles, which is positively correlated with bilateral trade and a robust predictor of trade comovement. Thus, business cycle comovement is influenced by trade both directly through bilateral trade and indirectly through trade exposure to similar partners. We propose a novel indicator to measure common exposure and show that when one accounts for the common exposure of a country pair, the effect of bilateral trade on business cycle comovement falls substantially.
The comovement of Canada’s and Mexico’s business cycles illustrates the main empirical issue. Both countries’ bilateral trade with the United States accounts for nearly 70 percent of total trade. It is no surprise, then, that the business cycles of Canada and Mexico are highly correlated. If we ignore common exposure in trade-comovement analysis, we exaggerate the effect of direct bilateral trade of these two countries–less than 3 percent of total trade–on business cycle comovement.
We derive a measure of common trade exposure that addresses this issue. For each country in a country pair, we calculate a trade-weighted ‘‘rest of world’’ cycle using the cyclical GDP fluctuations of all its trade partners. We then define common trade exposure of a country pair as the correlation between the two countries’ rest of world cycles over time. This measure of common exposure is positively correlated with bilateral trade intensity, as countries that trade together tend to also have similar trading partners. Given this positive relationship, if common exposure increases business-cycle comovement, then a regression that fails to control for common exposure will suffer from positive omitted variable bias, as explained by Kose and Yi (2006).
We perform standard cross-sectional trade-comovement regressions with and without our measure of common trade exposure as a control. We find that the effect of common trade exposure on comovement is both positive and significant, with a one standard deviation increase in common trade exposure yielding an average increase in comovement of more than 5 percentage points.
Furthermore, when common trade exposure is included in the regression, the estimated effect of bilateral trade intensity on GDP comovement falls over 40 percent, suggesting the omitted variable bias in the estimation of the effect of bilateral trade intensity is quite strong.
A high measure of common trade exposure amounts to more than just exposure to the same trading partners. Indeed, two countries could share none of the same trading partners and still have a high amount of common trade exposure because the trade partners of each country have highly correlated business cycles. This distinction is important as it represents a broader notion of common shocks that can affect a country pair through trade. To make this point, we repeat our analysis using a measure of the similarity in trade partners for a country pair. We find that this measure has a much weaker mitigating effect on the relationship between bilateral trade and comovement and is a less robust predictor of comovement than our measure of common trade exposure.
Indeed, we find that when we control for both common trade exposure and trade partner similarity, the coefficient on trade partner similarity turns negative, suggesting that the comovement-boosting effect of trade partner similarity is accounted for by its positive correlation with common exposure.
Previous studies have found that trade-comovement is stronger among more highly-developed countries. Motivated by this result, we split the data into two subsamples: one in which all country pairs are made up of high-income countries only, and one with all other country pairs. Consistent with the literature, we find that estimated trade-comovement is higher for high-income countries.
Furthermore, adding common trade exposure to the regression reduces the trade-comovement coefficient by less for the high-income country pairs and by more for other country pairs. Common trade exposure also has a stronger relationship with comovement among high-income countries. Thus, we conclude that bilateral trade and trade exposure to similar foreign cycles are more importance sources of comovement between high-income countries than for lower-income countries.
Our empirical results are robust to a battery of robustness tests. Among these, we pay special attention to potential issues of simultaneity bias or reverse causality by instrumenting bilateral trade and common trade exposure with gravity determinants, dividing the sample into panels to control for country-pair characteristics, and limiting the set of countries to small open economies that are assumed to not influence the foreign business cycle. These specifications confirm that common trade exposure is a robust predictor of business-cycle comovement. Indeed, we find the coefficient on common exposure to be positive and significant even when the coefficient on bilateral trade intensity is not. Furthermore, the trade-comovement relationship in these specifications still exhibits positive omitted variable bias.
Our empirical results offer a new lens through which to view the so-called ‘‘trade-comovement puzzle.’’ Kose and Yi (2001) show that a standard international real business cycle (IRBC) model is capable of matching the qualitative result that countries with higher bilateral trade have more correlated business cycles, but that the magnitude of this relationship is far lower than in the data.
Several researchers have since attempted to bridge the gap with new mechanisms in the model. We argue, however, that the target comovement to capture in the model is lower than previously thought.
We extend the three-country IRBC model of Drozd et al. (2021) to four countries, allowing us to match both bilateral trade intensity and common trade exposure to foreign cycles in calibration. The model features households that optimally choose imports, consumption, labor, and investment in physical capital and a non-contingent bond to maximize welfare. Similar to the previous literature, we find increasing bilateral trade in the IRBC model increases comovement but only accounts for about 11 percent of the coefficient in the data, despite our lower trade-comovement target. Furthermore, we find that the model cannot generate a statistically significant positive relationship between common trade exposure and comovement, nor the omitted variable bias in the trade-comovement relationship when omitting common trade exposure. These findings highlight additional failures of the baseline model.
Drozd et al. (2021) find that introducing a dynamic trade elasticity in the model (via import adjustment costs) strengthens the positive relationship between trade and comovement, as it reverses the income effect of foreign productivity shocks that move trade and GDP in different directions. Introducing this mechanism in our model brings it much closer to data. Indeed, we find that with reasonably calibrated adjustment costs, the model accounts for 76 percent of the trade-comovement relationship in the data. The stronger relationship between trade and comovement also serves to increase the effect of increasing common trade exposure in the model, as each country’s comovement with its rest of world cycle increases. With the same adjustment costs, the model accounts for 31 percent of the coefficient on common trade exposure. With even more restrictive adjustment costs, the model can match both coefficients from the data quite closely, though it would still fail to match the trade-comovement relationship from our empirical analysis that does not control for common trade exposure.
In addition to exploring the model-implied effect of increased bilateral trade or common trade exposure, we also explore the effect of increased trade partner similarity, our alternative measure discussed previously. Throughout, we find that the model-implied coefficient from raising trade partner similarity (holding common trade exposure and bilateral trade constant) is negative. Increasing trade partner similarity while holding common trade exposure fixed implies that the business cycles of foreign countries must be less correlated. Trade partner similarity increases comovement only as far as it is associated with higher common exposure to countries with similar cycles. This result may give some intuition for the same result in the data when we control for both common trade exposure and trade partner similarity.
In Section 2, we present a brief literature review. Section 3 describes our measures of common exposure, trade partner similarity, and bilateral trade intensity and reports the empirical results for the effect of each on a country pair’s business cycle comovement.
In Section 4, we evaluate the implications of our empirical results on the trade-comovement puzzle. Section 5 concludes.



翻译考点：
考点1:“common trade exposure”可以译为“共同贸易风险”，“共同贸易敞口”、“共同贸易关联度” 或 “对共同贸易伙伴的敞口”
考点2:‘’trade-comovement puzzle‘’可以译为“贸易-联动之谜”， “贸易-协同变动之谜” 或 “贸易与商业周期同步性之谜”
考点3:“trade comovement”推荐译为“贸易联动性”
考点4:“country pair”推荐译为“国家对”
考点5:“empirical issue”推荐译为“实证问题”或“实证案例”
考点6:“common shocks”推荐译为“共同冲击”
考点7:“non-contingent bond”必须译为“非或有债券”