Does International Fragmentation Occur in Sectors Other Than Machinery?*

It is well established in the published literature that international fragmentation has dramatically developed in East Asia since the 1990s, particularly in machinery industries, including general machinery, electric machinery, transport equipment and precision machinery. However, how far has international fragmentation developed in sectors other than the machinery sector, such as textiles or chemicals? To answer this question, we empirically investigate whether features of international fragmentation appear in other sectors by examining intraregional trade in East Asia. The results indicate that, although some features of international fragmentation can be observed in some other sectors, particularly in the chemical sector, they are most distinctive in the general/electric machinery sector.     

A dynamic generalization of the tobin model

The paper studies the stability and the non-neutrality of money issues of the neoclassical monetary growth theory when the liquidity preference function and the price dynamics equation are generalized in the Tobin model. Our generalization introduces Tobin's real purchasing power into the liquidity preference function, thereby allowing real balance flows to exert direct income effects. Such effects allow a number of separate cases in the price dynamics behavior, some of which lead to results that differ from the neoclassical propositions. Thus, these propositions are sensitive to the choice of a particular proxy measure of the transactions motives of the demand for money.     

Do Export Promotion Agencies Increase Exports?

In this paper, we examine the role of export promotion agencies (EPAs) in promoting exports from Japan and Korea. Looking at two home countries enables us to tackle endogeneity issues by controlling for both country‐pair time‐invariant characteristics and importing‐country time‐varying characteristics. Our empirical results indicate that EPA has a positive and significant effect on exports even when we control for endogeneity. However, the size of the effect becomes substantially smaller, implying the importance of addressing endogeneity in accurately measuring the impact of EPA on exports. In addition, we find that EPA's (marginal) effects are larger in exporting to low‐income trade partners than in exporting to high‐income trade partners.     

The magnification effect in global value chains

We examine the “magnification effect,” which demonstrates that as the number of separable production stages increases, trade increases dramatically as trade costs decline. We empirically investigate the existence of this magnification effect by estimating gravity-type equations for worldwide trade to obtain the tariff elasticity of trade per industry. We find that tariff elasticity is higher in industries with a greater degree of global value chain participation. These results are observed for both gross and value-added trade. Furthermore, we find that tariff elasticity is higher in intra-Asian trade, especially in machinery industries.     

Endogenous fertility cycles and childcare services

We construct a two-sector overlapping generation model with endogenous fertility, where one sector produces goods and the other produces childcare services. The elasticity of fertility-related expenditures on services is crucial for determining labor participation and whether fertility converges to a steady state with monotone or oscillation. If capital intensity in the goods sector is greater than the products of elasticity and capital intensity in the service sector, then capital per capita and fertility converge to a steady state monotonically. Conversely, they converge to a steady state with oscillations, otherwise. We find an inverse J-shaped relationship between fertility and elasticity.