13. economic effects of union coursenotes

Shea (2002) has found that production linkages positively affect industrial output co-movements within the U.S. Chapter 4 studies effects of vertical production linkages which include back- ward linkages from demand and forward linkages from supply, and of interna- tional spillovers on output co-movements across countries. Moreover, we find that Japan has strong correlations with other countries in the region in terms of supply disturbances, which reflect the vertical production linkages between Japan and the other countries.

The external demand shocks are highly correlated amongst ASEAN countries as well as other economies in the region. We find that the level of correlations of external shocks for our sample countries is not far behind the one for EMU countries. A Bayoumi-Eichengreen (1992) method of Structural VAR is employed to identify the long-run external shocks. Chapter 3 looks at the correlations of external disturbances amongst coun- tries in East Asia. Some background information of international trade in East Asia and of the current progress of regional integration achieved in East Asia is offered in Chapter 2. The first chapter explains the motivation to study the economic integration in East Asia and provides a brief literature survey on the topic of regional economic integration.

P>This thesis investigates the regional economic integration in East Asia, and empirically finds out the inter-relationship amongst vertical-specialisation-based trade, business cycles synchronisations and regionalisation.

13. economic effects of union coursenotes