This paper espouses a very different point of view in the globalization debate: that regionalization has larger impacts on the business cycles than globalization. This is very different from the predominant point of view that because of globalization, international actors such as corporations and wordwide regulatory agencies such as the WTO have much more leverage and significance in determining a specific country’s economic outcome.
While financial cycles tend to happen simultaneously worldwide, business cycles occur differently based on the economic makeup of regions. Impacts on the business cycle have a large influence on wages and unemployment.
“A wide range of developments at the regional level can explain the emergence of regional cycles. For example, the dramatic increase in intra-regional trade and financial flows fueled by regional integration initiatives can promote a higher degree of business cycle synchronization across countries in a region. Regional business cycles can also emerge because of the prominent role of region-specific shocks driven by the implementation of similar policies in a region. Moreover, cross-border spillovers of disturbances originating in a large country in a region can translate into more synchronized national business cycles in that region. “
This stance is very different from the traditional pro and anti-globalization arguments, as it supports the notion that policy that is more local and specific has a bigger impact than broad international policies. This resource will help me target my intended audience much better (government of a specific country) as it provides support to the notion that individual countries have more leverage than previously thought to influence their economy.