The role of production fragmentation in international business cycle synchronization in East Asia

► This paper analyzed the factors responsible for co-movements of business cycles in the developing countries of East Asia and the major developed economies. ► To this end, a DGE model was developed consisting of eight Asian countries on the one hand and Japan and the United States on the other. ► The model simulation revealed that the difference in the extent of business cycle synchronization between the two groups of countries in the 1990s and the 2000s can be attributed mainly to the expansion of fragmentation activities.