Economic Integration, Business Cycle, and Productivity in North America
IMF Working Papers, August 1, 2004
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- Economic Integration, Business Cycle, and Productivity in North America
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Bibliographic details
- Authors: Ayhan Kose, Roberto Cardarelli
- Published: August 1, 2004
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451856019.001
Summary and scope
- Examines the effect of the major Canada-U.S. trade agreements (NAFTA and CUSFTA) on the dynamics of business cycles and productivity in Canada.
- Focuses on trade flow expansion, the roles of common versus country-specific factors in business cycles, and the contribution of trade integration to total factor productivity and aggregate labor productivity convergence.
Key findings — business cycles
- The North American Free Trade Agreement (NAFTA) and the Canada-U.S. Free Trade Agreement (CUSFTA) have led to a substantial expansion of trade flows.
- Common factors have played a larger role in explaining business cycles in Canada and the United States since the early 1980s.
- Country-specific and idiosyncratic factors remain important for Canada despite increased commonality.
Key findings — productivity and integration
- Increased trade integration seems to have positively contributed to total factor productivity of Canadian industries.
- Persistence of structural differences between Canada and the United States has prevented convergence of aggregate labor productivity.
Policy implications and interpretation
- The findings weigh against moving toward a monetary union between Canada and the United States.
- Substantial benefits could be reaped from further reducing remaining barriers to trade.
Keywords and subject classification
- Subject: Business cycles, Labor productivity, North American Free Trade Agreement, Productivity, Trade balance
- Keywords: country factor, free trade, total factor productivity, trade linkage, United States market, WP
Publication and identification (from source)
- Pages: 46
- Volume: 2004
- Issue: 138
- Series: Working Paper No. 2004/138
- Stock No: WPIEA1382004
- DOI: https://doi.org/10.5089/9781451856019.001
- ISBN: 9781451856019
- ISSN: 1018-5941
- Authors: Ayhan Kose, Roberto Cardarelli
- Date: August 1, 2004
IMF Working Paper by Ayhan Kose and Roberto Cardarelli, "Economic Integration, Business Cycle, and Productivity in North America" (Working Paper No. 2004/138).
Content in this bundle
- _wp04138 - References