Business cycles synchronization among Argentina, Brazil and their main EU trading partners

ALEJANDRO D JACOBO

Revista Economía y Política

Universidad de Cuenca

Lugar: Cuenca; Año: 2020 vol. 32 p. 1 - 1

2477-9075

n this paper, we apply the Hodrick and Prescott filter to explore whether the economic fluctuations of Argentina, Brazil and their main European Union (EU) trading partners followed a similar pattern for the period 1995.1?2018.4. When both South American economies are analyzed together, the highest coincidence is observed in Gross Domestic Product (GDP) fluctuations (almost 75% of the observations lie on the same side of the zero line). However, as to the rest of GDP components, a drop is observed in the coincidences (the observations are close to 50%). While Argentinian GDP, private consumption and imports have a significant correlation with their Brazilian counterparts, this association is rather modest. As to their main EU partners, trade integration is likely to lead to a higher business cycles synchronization for Argentina, but it is not for Brazil.