Trade Integration, Specialization and Synchronization of Business cycles in ECO: Evidences of a Dynamic Correlation Index

Subject Areas : Labor and Demographic Economics

Saeed  Rasekhi ¹ (دانشیار دانشگاه مازندران)
Ahmad  Jafari Samimi ² (استاد دانشگاه مازندران)
somayeh  Sadeghi ³ (دانشجوی دکتری دانشگاه مازندران)

Received: 2015-04-16 Accepted : 2015-04-16 Published : 2015-04-01

Keywords: Business Cycles Synchronization, Trade Integration, GMM,

Abstract :

New international economic theories indicate that the increase of trade integrations is an important and effective element in Business cycles synchronization. This paper investigates the effects of trade integration and specialization on synchronization in ECO during 1993-2007, introducing a new and dynamic cross correlation index and using GMM methods. The results represent that increased trade (intra-industry trade and inter-industry trade) strengthen synchronization in ECO Countries. Also, more industrial similarities of a pair of countries induce higher bilateral synchronization.

References:

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