Some Business Cycles Consequences of Signing Trade Agreements: The Case of NAFTA
AbstractThis paper investigates the effects of signing a trade agreement on the correlations of the business cycle fluctuations of consumption, investment and output between two countries. We construct an international business cycle model with trade costs and we calibrate it to the United States and Mexico in order to estimate the impact of NAFTA on their co-movements. Although there exist some discrepancies between the theory and data in the degree of correlation, the direction of change corresponds to the one in the data.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2807.
Date of creation: Aug 2006
Date of revision:
International Business Cycles; Trade Agreements; International Co-movements;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-21 (All new papers)
- NEP-INT-2007-04-21 (International Trade)
- NEP-MAC-2007-04-21 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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