## Economic Integration, Business Cycle, and Productivity in North America

_IMF Working Papers, August 1, 2004_

## Source details

**Canonical URL:** [Economic Integration, Business Cycle, and Productivity in North America](https://www.imf.org/en/publications/wp/issues/2016/12/31/economic-integration-business-cycle-and-productivity-in-north-america-17559)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/economic-integration-business-cycle-and-productivity-in-north-america-17559/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/economic-integration-business-cycle-and-productivity-in-north-america-17559/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/economic-integration-business-cycle-and-productivity-in-north-america-17559/bundle-manifest.json)

## 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**
  - [_wp04138 - References (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2004/_wp04138.pdf.md){rel="alternate" type="text/markdown"}
  - [_wp04138 - References (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2004/_wp04138.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/economic-integration-business-cycle-and-productivity-in-north-america-17559_