Most analyses of international real business cycles and economic interdependence focus on developed economies, while studies on emerging economies are still scarce. This study contributes to the international RBC literature by empirically and theoretically evaluating business cycles of emerging and developed economies in the EU and NAFTA. The study finds that there are empirical regularities for emerging economies just as there are for developed ones. A key cross-country finding is that positive output and consumption correlations only hold for developed economies. It is shown that the...