The Impact of Trade Integration on Business Cycle Synchronisation for MERCOSUR Countries

Francesco Grigoli

DEGIT Conference Papers from DEGIT, Dynamics, Economic Growth, and International Trade

Abstract: Frankel and Rose (1998) reassessed the Mundellian criteria on OCAs and considered their application to be untenable, since trade integration and cycle synchronisation may be endogenous. This research aims at testing this hypothesis for Mercosur countries. In particular it intends to evaluate empirically the impact of reduced trade barriers, and then, increased trade on the synchronisation of business cycles. Using a panel data spanning the members over sixty-four quarters since the establishment of the FTA, my findings indicate a positive effect, implying intra-industry trade.

Keywords: Trade Integration; Business Cycle Synchronisation; Mercosur (search for similar items in EconPapers)
JEL-codes: E32 F15 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2009-06
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