The Federal Reserve Bank of Kansas City provides access to the full text of an article entitled "Economic Integration, Industrial Specialization, and the Asymmetry of Macroeconomic Fluctuations," written by Sebnem Kalemli-Ozcan, Bent E. Sorensen, and Oved Yosha. The article is part of the Research Working Paper series. The article discusses economic integration and a method of measuring shock asymmetry that calculates results for each U.S. state.

We show empirically that regions with a more specialized production structure exhibit output fluctuations that are less correlated with those of other regions (less symmetric fluctuations). Combined with the causal relation running from capital market integration to regional specialization found in an earlier study, this finding supports the idea that higher capital market integration leads to less symmetric output fluctuations. This mechanism counter-balances the effect of lower trade-barriers on the symmetry of fluctuations quantified by Frankel and Rose (1998). It is further argued that more asymmetric output shocks do not necessarily imply more asymmetric income shocks, since more cross-country ownership of productive assets may actually render income shocks more symmetric despite the greater asymmetry of output shocks. Some evidence in support of this claim is reported. Deriving a simple closed form expression for the gains from risk sharing for CRRA utility is an independent contribution of the present article.

This book offers the reader a state-of-the-art overview on theory and empirics of business cycle synchronisation, structural reform and economic integration. Focusing on the ongoing integration process in the euro area and the EU, it analyses the integration process that has taken place since the 1980s and which is marked by the advent of the euro and the substantial enlargement that resulted from the accession of 12 new Member States in East and Southern Europe.

The integration of goods and financial markets has progressed on a global scale in recent years. Thus, the cyclical patterns in the world economy may have changed too. Against this background, experts in international economics analyze the synchronization of business cycles and their volatility in this book. Is there an European business cycle? What is the role of multinational corporations and monetary policy in transmitting business cycles? Further, they discuss the need and feasibility of internationally coordinating monetary and exchange rate policies and the quantitative effects of tax competition.

This work explains the theoretical, historical and political background of the North American Free Trade Agreement (NAFTA), covering its impact and the debates surrounding its existence. The authors also introduce the theory of economic integration and post-war economic management.