We have analyzed the evolution of global and regional business cycles over the past five decades. Our results indicate that regional business cycles have increasingly become more pronounced especially in regions where intra-regional trade and financial linkages have registered rapid growth since the mid-1980s. In particular, the regional factor has explained a larger fraction of business cycle variation in the North American, European, Oceanian, and Asian regions over the past twenty-five years. Surprisingly, the importance of global factor has declined over time. The total contribution of common factors (global and regional) has not registered a significant change implying that there has been no change in the degree of international business cycle synchronicity during the past quarter century.
These results present a different interpretation of the impact of globalization on the synchronization of business cycles. Most commentators argue that globalization of trade and financial linkages have led to the globalization of business cycles as well. Contrary to these popular arguments, regional factors, rather than global ones, have become the driving forces of business cycles during the recent era of globalization. This has led to the emergence of regional business cycles.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."
I am not an expert in trade policy but I found this paper interesting since it highlighted the complex nature of globalization as well as the multiple factors impacting it.