Interregional Trade, Specialization, and the Business Cycle: Policy Implications for the EMU

Abstract

In this paper we analyse the effects of trade and specialisation on regional business cycle co-movement in the Economic and Monetary Union. Using a novel and unique bilateral regional trade dataset, we find that regions with stronger trade linkages and similar economic structures have more synchronized cycles. These results suggest that policies fostering regional specialization at the European level may reduce business cycle synchronization across regions and countries. This, in turn, might generate macroeconomic tensions in the common currency area. On the other hand, market integration policies can foster regional cycle synchronization and favour the functioning of the monetary union.

Економија Бивших Република Југославије

“…Some researchers use a regression analysis technique that is much more complex. Some works (Gianelle et al, 2017) construct the complex regression, decreasing the dimensionality of the variables, collecting several factors to the index. Also, qualitative variables are being used (for example: existence/non-existence of the mutual limit).…”

“…Посебно висока корелација утврђена је у регијама са једнаком специјализацијом (Imbs, 2004). У оквиру модела "центар−периферија" (Gianelle, Montinari, & Salotti, 2017) утврђено је да мање развијене земље еврозоне показују већу фазну разлику него развијеније земље. Пронађене су сличне разлике и за "старе" и "нове" земље Европске уније.…”

“…In the scope of the centre-periphery model it was shown (Gianelle, Montinari, & Salotti, 2017) that the less developed countries of the European Union euro area have bigger phase difference than the more developed countries. We have marked similar differences for "old" and "new" countries of the European Union.…”

“…Issues of the region's competitiveness are being studied in the works of the economists, as well (A. (Gianelle et al, 2017) конструишу сложену регресију смањујући димензионалност варијабли стратегијом груписања неколико фактора у индекс. Такође, користе се и квалитативне варијабле као што је на примјер постојање/непостојање заједничке границе међу државама.…”

The resistance of the greater Baltic region states to market cycle changes

“…Approaches that are very similar to the one used in this article have been proposed by Frankel and Rose (1998) and Gianelle et al (2017). Both works analyse international trade, specialisation, business cycles, and endogenous cycles within spatial processes.…”