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Journal of Economic Integration 2013 March;28(1) :85-107.
Trade Integration and Business Cycle Synchronization in the Euro Area: The Case of Southern European Countries
Sofia Gouveia and 
Leonida Correia 
University of Trás-os-Montes and Alto Douro (UTAD), Vila Real, Portugal
Corresponding Author: Sofia Gouveia ,Tel: +351 259350725, Email:
Copyright ©2013 Journal of Economic Integration
This paper examines synchronization in the euro area and the role of intra-EMU trade from 1981 to 2011, focusing in particular on southern European countries. The results indicate that the intensification of synchronisation that occurred in the nineties across almost all countries could partially be explained by the increase in trade, which has been strengthened since the start of the run-up to the EMU. For southern European economies, the results are mixed. We find also that trade imbalances have grown over time, becoming more evident in the common currency period. Furthermore, we document a positive and significant relationship between intra-EMU trade linkages and cyclical correlations.

JEL Classification
E32: Business Fluctuations; Cycles
F15: Economic Integration
F41: Open Economy Macroeconomics
Keywords: Business Cycle | Synchronisation | Trade | European Integration | Southern Europe
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