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Evidence on Common Features and Business Cycle Synchronization in Mercosur

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  • Carlos Enrique Carrasco Gutierrez
  • Fábio Augusto Reis Gomes

Abstract

The aim of this work is to analyze the business cycles of the Mercosur?s member countries in order to investigate their degree of synchronization. The econometric model uses the Beveridge-Nelson-Stock-Watson multivariate trend-cycle decomposition, taking into account the presence of common features such as common trend and common cycle. Once the business cycles are estimated, their degree of synchronization is analyzed by means of linear correlation in time domain and coherence and phase in frequency domain. Despite the evidence of common features, the results suggest that the business cycles are not synchronized. This may generate an enormous difficulty to intensify the agreements into Mercosur.

Suggested Citation

  • Carlos Enrique Carrasco Gutierrez & Fábio Augusto Reis Gomes, 2009. "Evidence on Common Features and Business Cycle Synchronization in Mercosur," Fucape Working Papers 15, Fucape Business School.
    • Handle: RePEc:bbz:fcpwps:15
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    References listed on IDEAS

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    Cited by:

    1. Gutierrez, Carlos Enrique Carrasco & Souza, Reinaldo Castro & Guillén, Osmani Teixeira de Carvalho, 2009. "Selection of Optimal Lag Length in Cointegrated VAR Models with Weak Form of Common Cyclical Features," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 29(1), May.
    2. Carlos Enrique Carrasco Gutiérrez & Reinaldo Castro Souza & Osmani Teixeira de Carvalho Guillén, 2007. "Selection of Optimal Lag Length in Cointegrated VAR Models with Weak Form of Common Cyclical Features," Working Papers Series 139, Central Bank of Brazil, Research Department.

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    More about this item

    Keywords

    Mercosur; business cycles; trend-cycle decomposition; common features; spectral analysis.;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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