Class Year
2008
Document Type
Article
Abstract
This paper analyzes the effects of industry structure similarities, free trade agreements, and geographic borders on regional business cycle correlation, using fifty US states, 10 Canadian provinces, and 1 Canadian territory as a case study. Using two cross-sectional OLS regressions and one panel data OLS regression, this study finds that pair-wise gross territorial product growth correlation decreased significantly after NAFTA ratification for state-state, province-province, and state-province territorial pairs, contrary to previous literature’s results. NAFTA effectively decoupled intra-national business cycles in the US and Canada while also desynchronizing cross-border pair-wise GSP growth correlation, but cross-border pair-wise GSP growth correlation was much less desynchronized post-NAFTA relative to intra-national pairs. These results indicate that NAFTA and the US-Canada border may produce two opposing forces that dampen each other’s desynchronizing effects.
Recommended Citation
Marll, Samuel D.
(2008)
"Industry Structure Similarities, Trade Agreements, and Business Cycle Synchronization,"
Gettysburg Economic Review: Vol. 2, Article 4.
Available at:
https://cupola.gettysburg.edu/ger/vol2/iss1/4
Included in
Growth and Development Commons, Industrial Organization Commons, International Economics Commons, Labor Economics Commons