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Economic dependency between the advanced economies and the developing economies may have been increasing due to the increased trade and financial flows in the globalized world, especially since the last decades of the 20th Century. This conjecture is challenged by the decoupling hypothesis, which claims that the dependency may actually have been decreasing because emerging and developing economies are becoming more integrated and dependent upon each other. This research project examines business cycle synchronization and trade links in a cohort of 17 emerging and developing economies in relation to the US. The findings indicate that there is no business cycle decoupling between the advanced economies and the developing economies. Trade is a significant channel for business cycle synchronization, but it is found that trade openness is a more important driver of business cycle synchronization than bilateral trade intensity is.
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San, Myat Su, "Economic Dependency between Advanced Economies and Developing Economies" (2015). Senior Projects Spring 2015. 330.