The impact of trade integration on business cycle co-movements in Europe

Kwanho Shin, Yunjong Wang

Research output: Contribution to journalReview articlepeer-review

16 Citations (Scopus)


This paper extends our previous research on East Asia to the case of 14 European countries from 1977 to 1999. According to our empirical results, intraindustry trade is again the major channel through which the business cycles of European countries become synchronized. This contrasts with existing studies that found that increased trade itself led to the synchronization of business cycles. Our findings have important implications for the adoption of a currency union, as we expect that the costs of joining a currency union will diminish significantly only when intraindustry trade becomes dominant.

Original languageEnglish
Pages (from-to)104-123
Number of pages20
JournalReview of World Economics
Issue number1
Publication statusPublished - 2005 Apr


  • Business cycle co-movements
  • Europe
  • Trade integration
  • Trade intensity intraindustry trade

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)


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