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A Provincial View of Economic Integration

Author

Listed:
  • Tamim Bayoumi

    (International Monetary Fund)

  • Michael W. Klein

    (International Monetary Fund)

Abstract

This paper develops a method of testing levels of economic integration based upon consumption smoothing, and tests it using data on trade balances across Canadian provinces. The results indicate the provinces are highly integrated within Canada, but integration between Canada and the rest of the world is partial. Provincial trade balances respond only about half as much to events in the rest of the world as they do to events within Canada. In short, national borders appear to matter for intertemporal trade.

Suggested Citation

  • Tamim Bayoumi & Michael W. Klein, 1997. "A Provincial View of Economic Integration," IMF Staff Papers, Palgrave Macmillan, vol. 44(4), pages 534-556, December.
    • Handle: RePEc:pal:imfstp:v:44:y:1997:i:4:p:534-556
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    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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