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Trade integration and business cycle convergence: is the relation robust across time and space?

Research output: Contribution to Journal/MagazineJournal articlepeer-review

Published
<mark>Journal publication date</mark>1/06/2008
<mark>Journal</mark>The Scandinavian Journal of Economics
Issue number2
Volume110
Number of pages15
Pages (from-to)403-417
Publication StatusPublished
<mark>Original language</mark>English

Abstract

In this paper we investigate the relationship between trade intensity and the business cycle correlation using a panel data set taken from 24 countries over the period 1959–2003. Most previous studies did not account for the possibility that the business cycle correlation may be influenced by unobservable country‐pair specific effects. Our estimates, using both fixed‐ and random‐effects methodologies, suggest that trade intensity and the business cycle correlation are positively related to one another. However, detailed investigation shows that this relationship exists mainly for the European countries.