This essay has been submitted by a student. This is not an example of the work written by professional essay writers.

Economics and Gross Domestic Products

downloadDownload printPrint

Pssst… we can write an original essay just for you.

Any subject. Any type of essay. We’ll even meet a 3-hour deadline.

Get your price

121 writers online

Download PDF

An economy moves between extended periods of positive output growth and shorter periods of negative growth. Shifting between these phases is typically referred to as the business cycle. This cycle is a prominent feature in economies—both advanced and developing—and can be correlated across countries. The correlation of business cycles implies that groups of countries are in the same phase for stretches of time. The example which shows the annual gross domestic product(GDP) growth rate in United States, Canada and Mexico also show the correlation of business cycle between countries. From 1981 to 2014. The GDP of United States and Canada move similarly over the past 30 years, in the past 10 years the Mexican economy also fell into sync. The correlation between U.S. and Mexico increased by over 100 percent, which is good to them.

Business cycle synchronization might occur because countries experience shocks common to all countries. For example, the oil price shock ups and down the price of oil for everyone in the country. Or shocks common to countries in the same region. For example, the interruption of weather and collision between region. Otherwise, shocks could occur in one country and spread rapidly to nearby countries. The degree to which business cycles synchronization across countries might depend on, among other things, physical distance, the amount of bilateral trade, similarities in institutions or language, or historical trade routes.

Imagination of country’s business cycle as having a global component, a regional component and a country component is one of the way to think about business cycle synchronization. This three type of component has their own define and efficacy. Global component captures the same movement of all country’ business to represent as global synchronization. Regional component captures the same movement with country’ neighbour to represent as regional synchronization. Country component capture the movement in business cycle which are unique to the country leading it to a more independent business cycle. The relative of these component will influence the strength of the correlation of country’s business cycle, if the regional component of a country’ s cycle is larger than the other two components, than the country may appear more synchronized with its neighbors than with the world.

Over time everything changes, as well as the determinants of business cycle synchronization like institutions and trade patterns. The formation of the European Union and the ratification of the North American Free Trade Agreement will be the good example of change. Increased bilateral trade between countries by decrease in transportation costs and the ability of more ports to off-load large shipping containers. regional trade agreements have replaced the trade led to globalization, rather than globalized business cycle synchronization it has more potential in the future.

The important of regional cycle in Europe and Asia had risen significantly, to understand the synchronization and which country are synchronized can be the important assembly for implementing countercyclical policy. Downturns in other countries that have synchronous cycles can forecast domestic downturns, leading to more timely policy. Understanding synchronization can also provide insight into the impact of trade diversification, of the increase in financial flows and of regional trade agreements, all of which have helped to define the global economy in the 21st century.

In conclusion, the global components and regional components, which indicate cross-country comovement, rather than the country components, which indicate how data within the country move. For this article’ authors, what they do for studying the business cycle is consider the importance of these components for each country’s business cycle over a 30-year period beginning in 1960. Countries are sorted into seven “continental” regions based on geographic proximity. And then consider whether geographically defined regions are optimal and provide some evidence for using economic institutions, in addition to physical distance, as a measure of forming regions.

Remember: This is just a sample from a fellow student.

Your time is important. Let us write you an essay from scratch

experts 450+ experts on 30 subjects ready to help you just now

delivery Starting from 3 hours delivery

Find Free Essays

We provide you with original essay samples, perfect formatting and styling

Cite this Essay

To export a reference to this article please select a referencing style below:

Economics and Gross Domestic Products. (2019, January 15). GradesFixer. Retrieved January 27, 2022, from
“Economics and Gross Domestic Products.” GradesFixer, 15 Jan. 2019,
Economics and Gross Domestic Products. [online]. Available at: <> [Accessed 27 Jan. 2022].
Economics and Gross Domestic Products [Internet]. GradesFixer. 2019 Jan 15 [cited 2022 Jan 27]. Available from:
copy to clipboard

Sorry, copying is not allowed on our website. If you’d like this or any other sample, we’ll happily email it to you.

    By clicking “Send”, you agree to our Terms of service and Privacy statement. We will occasionally send you account related emails.


    Attention! This essay is not unique. You can get a 100% Plagiarism-FREE one in 30 sec

    Receive a 100% plagiarism-free essay on your email just for $4.99
    get unique paper
    *Public papers are open and may contain not unique content
    download public sample

    Sorry, we could not paraphrase this essay. Our professional writers can rewrite it and get you a unique paper.



    Please check your inbox.

    Want us to write one just for you? We can custom edit this essay into an original, 100% plagiarism free essay.

    thanks-icon Order now

    Hi there!

    Are you interested in getting a customized paper?

    Check it out!
    Having trouble finding the perfect essay? We’ve got you covered. Hire a writer

    Haven't found the right essay?

    Get an expert to write you the one you need!


    Professional writers and researchers


    Sources and citation are provided


    3 hour delivery