The Vertical Specialization and Business Cycles Synchronization among Industrial Countries

• Main Authors: Wan-lai Chung, 鍾萬來
• Other Authors: Yung-hsiang Ying
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/phntt4

碩士 === 國立中山大學 === 經濟學研究所 === 95 === Business cycle is an important issue for economist. Because the fluctuations of product and employment have deep influences on people’s life and social stability, almost every government tries to reduce the volatility of national business cycles. If we want to make it, we must realize it first. Since countries communicate with each other more frequently in recent decades, the volatility of national product cycles is not only influenced by domestic economic variables but also foreign ones. The purpose of this paper is to analyze the effect of transmission mechanism on international business cycles synchronization (BCCs). The major purpose of this paper is to analyze the effect of international vertical specialization on BCCs among industrial countries. There are two kinds of effect. One is indirect effect. Vertical specialization happens between industrial countries and developing countries, so it can reduce bilateral trade intensity among industrial countries. Through this way, BCCs among industrial countries will reduce. The other one is direct effect. Vertical specialization changes the economic structure of industrial countries. Industrial countries can focus on product development and market research. This kind of economic structure is less capital intensive, which lessens the effect of common shocks to industrial country’s business cycles. BCCs among industrial countries will reduce. We measured the effect using the data from G6 (Canada, France, Germany, Japan, UK and US). The result is consistent with our inferance. Vertical specialization can reduce BCCs by reducing bilateral trade intensive among industrial countries. There is a negative relation between Vertical specialization and BCCs among industrial countries.