Business Cycles Synchronization and Trade Integration: Comparison of D8, European Union and South East Asia Countrie

In theories of international economics, the issue of business cycles synchronization and its effective factors with emphasizing on trade integration is essential for regional trade creation and development among countries. The main purpose of this paper is evaluation and comparison of the effective factors on business cycles synchronization especially the role of trade integration among Euro Union, ASEAN and D8 countries using panel data for a period of 2000-2013. The results show that trade intensity, intra-industry trade and vertical intra-industry trade as indices of trade integration have a positive and significant effect in Europe and ASEAN. Also in D8 countries, the effect of trade intensity and intra-industry trade on business cycles synchronization is positive and significant, while vertical intra-industry trade is not effective. Moreover, the comparison among economic blocks shows that intra-industry trade relative to trade intensity and vertical intra-industry trade has more effect on business cycles synchronization.