Economic Integration and Changes in the Business Cycle in East Asia: Is the Region Decoupling from the Rest of the World?

2009 ◽  
Vol 8 (1) ◽  
pp. 107-140 ◽  
Author(s):  
Yung Chul Park ◽  
Kwanho Shin
Keyword(s):  
United States ◽  
Business Cycle ◽  
East Asia ◽  
Regional Integration ◽  
Financial Integration ◽  
The United States ◽  
Trade Integration ◽  
Global Integration ◽  
Trade Relations ◽  
The Business Cycle

Countries in East Asia (EA) have made a great deal of progress in integrating their economies since the early 1990s. There has been a sustained increase in intra-regional trade in EA. On finance, however, regional financial integration has been lagging behind trade integration and EA has reached out to global financial markets to effect deeper global integration. The purpose of this paper is to analyze the effects of intra-regional and extra-regional financial integration on changes in the pattern of EA's business cycle since 1990 to see whether there is any ground for “decoupling” of EA from the United States and the EU. On trade relations, the empirical results show that deepening trade integration contributes to more synchronized output movements among EA countries. There is also evidence that financial integration enhances more synchronization of output, but because its impact is not strong, the extra-regional integration does not necessarily dispute the prediction that EA's output movement has become more idiosyncratic than before, and therefore less closely tied with that of the United States.

scholarly journals Asymmetric dynamics between uncertainty and unemployment flows in the United States

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Ali Ahmed ◽  
Mark Granberg ◽  
Victor Troster ◽  
Gazi Salah Uddin
Keyword(s):  
United States ◽  
Business Cycle ◽  
Negative Impact ◽  
The United States ◽  
Large Uncertainty ◽  
Monthly Data ◽  
Uncertainty Measures ◽  
Linear And Nonlinear ◽  
The Business Cycle ◽  
The U.S

AbstractThis paper examines how different uncertainty measures affect the unemployment level, inflow, and outflow in the U.S. across all states of the business cycle. We employ linear and nonlinear causality-in-quantile tests to capture a complete picture of the effect of uncertainty on U.S. unemployment. To verify whether there are any common effects across different uncertainty measures, we use monthly data on four uncertainty measures and on U.S. unemployment from January 1997 to August 2018. Our results corroborate the general predictions from a search and matching framework of how uncertainty affects unemployment and its flows. Fluctuations in uncertainty generate increases (upper-quantile changes) in the unemployment level and in the inflow. Conversely, shocks to uncertainty have a negative impact on U.S. unemployment outflow. Therefore, the effect of uncertainty is asymmetric depending on the states (quantiles) of U.S. unemployment and on the adopted unemployment measure. Our findings suggest state-contingent policies to stabilize the unemployment level when large uncertainty shocks occur.

Economic Integration and Business Cycle Synchronization in Asia

2013 ◽  
Vol 12 (1) ◽  
pp. 76-99 ◽  
Author(s):  
Chi Gong ◽  
Soyoung Kim
Keyword(s):  
Business Cycle ◽  
Economic Integration ◽  
Regional Integration ◽  
Financial Integration ◽  
Trade Integration ◽  
Business Cycle Synchronization ◽  
Empirical Results ◽  
Positive Effects ◽  
Negative Effect ◽  
Positive Effect

This paper examines the effects of internal (or regional) vs. external (inter-regional) integration and of trade vs. financial integration on regional business cycle synchronization in Asia. The empirical results show the following: (1) similar and strong common external linkages have significant positive effects on regional business cycle synchronization; (2) after controlling for external linkages, internal trade integration has a positive effect on regional business cycle synchronization but internal financial integration has a negative effect; and (3) the measures of external linkages, particularly the measure of external financial linkages, are more important than those of internal linkages in explaining regional business cycle co-movements.

The Maquiladora Industry: Recent Downturn And Future Prospects

2011 ◽  
Vol 8 (3) ◽  
Author(s):  
Javad Gorjidooz ◽  
Bijan Vasigh
Keyword(s):  
United States ◽  
Economic Growth ◽  
Business Cycle ◽  
Labor Demand ◽  
The United States ◽  
Global Competition ◽  
Bracero Program ◽  
Major Player ◽  
The Business Cycle ◽  
The U.S

The Maquiladora industry was created in the mid-1960 as the United States terminated the Bracero program. The main objective of the Bracero program was to bring in Mexican workers to fulfill U.S. agricultural labor demand. The end of the Bracero program left thousands of unemployed farm workers in Mexican cities bordering the U.S. The Maquiladora programs intent was to subsidize foreign manufacturers that set up plants on the Mexico side of the border to create jobs for the Mexican workers. Mexico allowed plants to temporarily import supplies, parts, machinery, and equipment necessary to produce goods and services in Mexico duty-free as long as the output was exported back to the United States. U.S. firms, as well as other multinational companies, responded enthusiastically to the lure of cheap labor. Mexico experienced high economic growth and become a major player in exporting intra-industry products to the U.S. The NAFTA and other free trade agreements signed by Mexico helped the economic growth of the Maquiladora region. Maquiladora employment increased significantly since the inception of the Maquiladora industry and Maquiladora exports now account for half of Mexicos total exports. The Maquiladora industry is U.S.-demand driven since most of Mexicos Maquiladora production is destined for the U.S. market. The recent recession in the U.S. took a heavy toll on Mexicos Maquiladora industry. Another challenge to the Maquiladora industry is raising global competition, particularly from China. Therefore, the magnitude of the industrys contraction during the most recent recession suggests that there are more factors influencing the industry than just the business cycle. This paper presents the creation of the Maquiladora industry, its success following the NAFTA agreement, and its recent downturn. It also explores the answers to the following questions: How much of the Maquiladora downturn was due to the business cycle? How much was due to structural change? Is the Maquiladora industry ready to face rising global competition?

Financial Market Integration in East Asia: Regional or Global?

2006 ◽  
Vol 5 (1) ◽  
pp. 73-89 ◽  
Author(s):  
Jongkyou Jeon ◽  
Yonghyup Oh ◽  
Doo Yong Yang
Keyword(s):  
East Asia ◽  
Financial Market ◽  
Regional Integration ◽  
Market Integration ◽  
Asset Price ◽  
The United States ◽  
Market Mechanism ◽  
Global Integration ◽  
Financial Market Integration ◽  
Price Approach

This paper investigates whether financial markets in East Asia are integrated with global markets or with each other.We use two approaches: a volume-based approach and an asset price approach. Our overall results suggest global integration of these markets rather than regional integration and that there is no anchor market in the region that would match the advanced markets such as the United States. Though global integration is not a force that competes with regional integration, there seems to be no strong sign of the creation of an effective financial market mechanism in East Asia.

scholarly journals Introduction to Special Issue: Japan as Studied in Japan's Neighbors and Japan Itself

2010 ◽  
Vol 11 (3) ◽  
pp. 271-273
Author(s):  
TAKASHI INOGUCHI
Keyword(s):  
United States ◽  
Soviet Union ◽  
East Asia ◽  
Regional Integration ◽  
Western Europe ◽  
East Asian ◽  
The United States ◽  
Special Issue ◽  
Total Trade ◽  
The Soviet Union

This special issue highlights one of the important subjects of this journal, Japanese politics and international relations, as studied in Japan's neighbors, Korea and China, and Japan itself. The aim is to elucidate the angles taken by these three countries when examining Japan. Before going into the similar and different angles taken, it may be helpful to note two noteworthy features of their interactions and transactions. They are, first, the steady integration of these economies and societies; second, the tenacity of ill-feelings held toward Japan. First, if the lifting in 1991 of the embargo imposed on China for its Tiananmen massacre of 1989 is a key benchmark for the steady and swift regional integration in East Asia since, it did not take a dozen years before the intra-regional trade ratio over total trade went beyond 50%. As compared to parallell figures for Europe at various time points, say 1962 when the Rome Treaty was signed and 1990 when the Maastricht Treaty was signed, the number of years necessary for intraregional trade over total trade to exceed 50% are a dozen years for East Asia versus thirty odd years for Western Europe. It has a lot to do with the pattern of inclusion in East Asian regional integration. It includes China and the United States. In Europe regional integration was meant to enable Western Europe to stand alone. Bothvis-à-visthe United States andvis-à-visthe Soviet Union, Western Europe wanted to band together and bind together those with shared values. East Asian regional integration differs from this European model. The East Asian model is first to strengthen themselves, while seeking opportunities regionally and globally to attain, as a result of their self-strengthening strategy, high regional strength and high regional integration.

New Estimates of Prewar Gross National Product and Unemployment

1986 ◽  
Vol 46 (2) ◽  
pp. 341-352 ◽  
Author(s):  
Christina Romer
Keyword(s):  
United States ◽  
Business Cycle ◽  
Unemployment Rate ◽  
Serial Correlation ◽  
Gross National Product ◽  
The United States ◽  
National Product ◽  
Okun’S Law ◽  
Okun's Law ◽  
The Business Cycle

The paper examines in detail revised estimates of unemployment and gross national product for the United States before 1929. It first discusses the nature of the revisions to each series and contrasts the assumptions underlying the new data with those underlying the Kuznets GNP series and the Lebergott unemployment rate series. It then examines the business cycle properties of the new prewar estimates. In analyzes the volatility and serial correlation properities of the new macroeconomic series and investigates the Okun's Law relationship between unemployment and GNP, concluding with an evaluation of the assumptions underlying the old and new data.

scholarly journals Has The Business Cycle Been Dampened? The Case Of Canada, Sweden And The United States

2011 ◽  
Vol 24 (4) ◽  
Author(s):  
Bakhtiar Moazzami ◽  
Bahram Dadgostar
Keyword(s):  
United States ◽  
Business Cycle ◽  
The United States ◽  
Economic Fluctuations ◽  
Real Output ◽  
Economic Policies ◽  
Output Data ◽  
Bretton Woods ◽  
Stabilization Policies ◽  
The Business Cycle

Have postwar stabilization policies reduced economic fluctuations compared to earlier periods? Using output data for Canada, Sweden and the United States for the period 1929-2005 and three different de-trending procedures, we found that postwar economic policies have been successful in reducing business cycle volatility. We also found that fluctuations in real output have been significantly dampened during the post-Bretton Woods era compared to earlier periods.

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