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

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  • Francesco Grigoli
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    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.

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    Bibliographic Info

    Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c014_016.

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    Length: 27 pages
    Date of creation: Jun 2009
    Date of revision:
    Handle: RePEc:deg:conpap:c014_016

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    Keywords: Trade Integration; Business Cycle Synchronisation; Mercosur;

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