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

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  • Francesco Grigoli

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.

Suggested Citation

  • Francesco Grigoli, 2009. "The Impact of Trade Integration on Business Cycle Synchronisation for MERCOSUR Countries," DEGIT Conference Papers c014_016, DEGIT, Dynamics, Economic Growth, and International Trade.
  • Handle: RePEc:deg:conpap:c014_016
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    File URL: http://degit.sam.sdu.dk/papers/degit_14/c014_016.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Trade Integration; Business Cycle Synchronisation; Mercosur;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F15 - International Economics - - Trade - - - Economic Integration

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