Global trade channels deepen, shaping common business cycles across countries.
Globalization and trade play a big role in how economic changes in one country affect others. Researchers have looked at how trade links impact business cycles between countries. Some studies use real data to show that stronger trade connections with major economies like the G7 can make a country's economy more similar to the world's. Other studies use complex models to explain why some economic variables are more closely related between countries than others. By using these models, researchers have been able to better understand how shocks in one country can affect others through trade.