Economic integration and synchronization of economic cycles in Ecuador: Evidence through Granger causality
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The growing interdependence among open economies has renewed academic interest in the mechanisms that govern the dynamics of economic cycles under structural exchange rate constraints. This study examines the relationship between trade integration and the cyclical dynamics of Ecuador's Gross Domestic Product during 2000-2025, in its internal dimension, under the official dollarization regime. A sample of 103 quarterly observations from the National Accounts of the Central Bank of Ecuador was used, applying the Christiano-Fitzgerald filter to isolate cyclical components, under a quantitative correlational-explanatory approach. A Vector Autoregressive Model of one lag was specified, selected by combining information criteria with the stability condition, and the Granger causality test was applied in a bivariate manner. The results show that household consumption, government spending, and exports Granger-cause the real GDP cycle and vice versa, with significance levels between 1% and 5%; gross fixed capital formation and imports showed no evidence of causality. In the absence of autonomous monetary policy, the trade channel appears to play a relevant role in the transmission of international disturbances, in a selective manner.
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