Production Networks and the Open Macroeconomy

The Singapore Economic Review, Vol. 53, Issue 3, pp. 509-521, 2008

Posted: 11 Nov 2009

See all articles by Sven W. Arndt

Sven W. Arndt

Claremont McKenna College - Robert Day School of Economics and Finance

Date Written: December 2008

Abstract

A key feature of globalization in the current era has been the rapid spread of cross-border production sharing in many regions of the world, including Europe, North America and Asia. The effects of these developments in the context of regional trade integration have been examined in the recent literature. This paper looks at their implications for regional monetary integration and exchange-rate policies. Cross-border production networks and the intra-industry trade associated with them affect exchange-rate behavior, balance of payments adjustment, and the transmission of shocks and disturbances. This paper examines the policy implications of regional production networks that (i) are confined to the countries of a given region, and (ii) involve a dominant extra-regional economy.

Keywords: Regionalism, production networks, monetary cooperation, exchange-rate regimes

Suggested Citation

Arndt, Sven W., Production Networks and the Open Macroeconomy (December 2008). The Singapore Economic Review, Vol. 53, Issue 3, pp. 509-521, 2008, Available at SSRN: https://ssrn.com/abstract=1503774

Sven W. Arndt (Contact Author)

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States

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