Evaluating Determinants of Business Cycle Synchronization in the OIC Member Countries

Abstract

In the new literature of international trade, the focus has been on discussion of how trade integration affects business cycle synchronization. The objective of this paper is exploring the main determinants of business cycle synchronization whit emphasizing on the trade integration which have been evaluated through econometric model over period 1990-2005. The empirical results show that trade integration is significantly the major factor of business cycle synchronization in these countries particularly during 1990-2005. In addition, similarities in both fiscal and monetary policies as well as similarities in economics structures influence significantly business cycle synchronization in the region.