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Are the Mexican States and the United States Business Cycles Synchronized? Evidence from the Manufacturing Production

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  • Pablo Mejía-Reyes

    ()
    (Researcher, Facultad de Economía, Universidad Autónoma del Estado de México (UAEMEX). Toluca, E.M. Mexico.)

  • Jeanett Campos-Chávez

    ()
    (Coordinator of Cultural Outreach, Facultad de Economía, Universidad Autónoma del Estado de México (UAEMEX). Toluca, E.M. Mexico.)

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    Abstract

    This paper analyses the degree of synchronization between the Mexican states and the US business cycles by using a growth cycle approach for the period 1997-2007. The business cycle indicators are obtained from seasonally-adjusted monthly manufacturing production. Our results confirm that the Mexican aggregate cycle is highly synchronized with the US business cycle. However, although specific Mexican state cycles are pro-cyclical with respect to the US business cycle, their synchronization is very heterogeneous. In particular, it is strong and robust only for the states of Baja California, Jalisco, Nuevo León and the Federal District, and at least moderate for the state of Mexico and Querétaro. The results are robust with respect to three different detrending methods. Synchronization may be explained by the high volumes of international trade carried out by foreign firms in the case of the central and traditionally industrialized states, and by the “maquila” production in the Northern bordering states. This synchronization may be explained by the vertical integration of the productive processes resulting from the internationalization of production of multinational firms.

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    File URL: http://www.economiamexicana.cide.edu/num_anteriores/XX-1/03.EM.Manufacturing(79-112).pdf
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    Bibliographic Info

    Article provided by in its journal Economia Mexicana NUEVA EPOCA.

    Volume (Year): XX (2011)
    Issue (Month): 1 (January-June)
    Pages: 79-112

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    Handle: RePEc:emc:ecomex:v:20:y:2011:i:1:p:79-112

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    Related research

    Keywords: growth cycles; international synchronization; sub-national business cycles; Mexican states.;

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    Cited by:
    1. Salá Rios, Mercé & Farré Perdiguer, Mariona & Torres Solé, Teresa, 2011. "El ciclo económico de Cataluña. Un análisis de la simetría respecto a España y a la UEM/Catalonia's Business Cycle. An Analysis of the Symmetry in Relation to Spain and the EMU," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 29, pages 913 (24 pá, Diciembre.

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