Evaluation of contagion or interdependence in the financial crises of Asia and Latin America, considering the macroeconomic fundamentals

This article investigates the existence of contagion between countries on the basis of an analysis of returns for stock indices over the period 1994-2003. The economic methodology used is that of multivariate GARCH family volatility models, particularly the DCC models in the form proposed by Engle and Sheppard (2001). The returns were duly corrected for a series of country-specific fundamentals. The relevance of this procedure is highlighted in the literature by the work of Pesaran and Pick (2003). The results obtained in this paper provide evidence favourable to the hypothesis of regional contagion in both Latin America and Asia. As a rule, contagion spread from the Asian crisis to Latin America but not in the opposite direction

Exchange rate misalignments, interdependence, crises, and currency wars: an empirical assessment

Este trabalho tem por objetivo comparar metodologias distintas para cálculo de desalinhamento cambial além de testar a hipótese se as taxas de câmbio dos diversos países sofrem influencia apenas dos seus próprios fundamentos ou também da taxa de câmbio e dos fundamentos de outros países. Estas hipóteses consistem, respectivamente, na ausência ou na existência de interdependência entre os diversos países. Para realizar tal tarefa utilizam-se duas estratégias empíricas. A primeira baseia-se em avaliar se um modelo multivariado de séries de tempo usualmente utilizada na literatura de desalinhamento cambial com dados apenas do próprio país em análise pode ser melhorado através da adição de variáveis relacionadas a outros países usando o algoritmo proposto por David Hendry e co-autores. A segunda estratégia consiste em estimar um panel longo com as variáveis utilizadas para estimar desalinhamento cambial e testar formalmente a hipótese de ausência de interdependências. Os resultados sugerem que em ambas estratégias existe evidência de existência de interdependência. Esta ocorreria mais por conta de fatores ligados ao curto prazo, ou seja, o que explicaria o valor da taxa de câmbio de um país no longo prazo seriam seus próprios fundamentos enquanto no curto prazo fatores externos poderiam causar desvios

Payoff interdependence and information externalities

This paper studies entry under information and payoff externalities. We consider a sequential investment game with uncertain payoffs where each firm is endowed with a private signal about profitability. It is shown that both over- and under-investment characterize the equilibria and that under-investment only occurs when investments are complements. Further we find that a reverse informational externality is present.

Assessing interdependence among countries' fundamentals and its implications for exchange rate misalignment estimates: An empirical exercise based on GVAR

Exchange rates are important macroeconomic prices and changes in these rates a ect economic activity, prices, interest rates, and trade ows. Methodologies have been developed in empirical exchange rate misalignment studies to evaluate whether a real e ective exchange is overvalued or undervalued. There is a vast body of literature on the determinants of long-term real exchange rates and on empirical strategies to implement the equilibrium norms obtained from theoretical models. This study seeks to contribute to this literature by showing that the global vector autoregressions model (GVAR) proposed by Pesaran and co-authors can add relevant information to the literature on measuring exchange rate misalignment. Our empirical exercise suggests that the estimate exchange rate misalignment obtained from GVAR can be quite di erent to that using the traditional cointegrated time series techniques, which treat countries as detached entities. The di erences between the two approaches are more pronounced for small and developing countries. Our results also suggest a strong interdependence among eurozone countries, as expected

Dependence, interdependence and development

Analiza diversos temas para responder a la interrogante: Cual es el pensamiento de la CEPAL sobre la dependencia, interdependencia y desarrollo?

Changes in Chile's production structure, 1986-1996: output and industrial interdependence

Includes bibliography

Expectations and industrial output in Uruguay: Sectoral interdependence and common trends

This paper examines the interdependence between expectations and growth by analysing Uruguayan manufacturing industry, divided for the purpose into four industry groupings differentiated by trade participation and production specialization. The study shows that there is a long-run relationship between industrialists' expectations and output growth in each grouping. In the most trade-oriented groupings the relationship is one of predetermination, showing how useful expectations are as a guide to sectoral growth. Expectations in the four industrial groupings are shown to follow a common long-run trend, identified with the one guiding the export grouping. Impulse-response simulations derived from a multisectoral vector autoregression (VAR) model confirm the important role of the industries most exposed to international competition in spreading shorter-term shocks.

Family models of independence/interdependence and their intergenerational similarity in Germany, Turkey, and India

Family change theory suggests three ideal-typical family models characterized by different combinations of emotional and material interdependencies in the family. Its major proposition is that in economically developing countries with a collectivistic background a family model of emotional interdependence emerges from a family model of complete interdependence. The current study aims to identify and compare patterns of family-related value orientations related to family change theory across three cultures and two generations. Overall, N = 919 dyads of mothers and their adolescent children from Germany, Turkey, and India participated in the study. Three clusters were identified representing the family models of independence, interdependence, and emotional interdependence, respectively. Especially the identification of an emotionally interdependent value pattern using a person-oriented approach is an important step in the empirical validation of family change theory. The preference for the three family models differed across as well as within cultures and generations according to theoretical predictions. Dyadic analyses pointed to substantial intergenerational similarities and also to differences in family models, reflecting both cultural continuity as well as change in family-related value orientations.

From the Sea to Paris and back: On the interdependence of economic warfare, weather conditions and the submarine campaign 1916-1917

Starting of from Avner Offer’s comment that the First World War was not only a war of steel and gold, but also of bread and potatoes (1989: 1) and my own research on British as well as Australian preparations for economic warfare and based on sources from the entente as well as the central powers but also from the United States, Canada and Australia, may presentation will focus on the interdependence of the measures taken by entente as well as central power authorities in the second half of 1916. Already a year before both sides had become aware that this war would not only be decided on the battlefield, but that the issues of primary as well as secondary resources would be decisive. Accordingly measures that could strike the enemy in this field were discussed and put into place more and more and this at time, when weather conditions caused a reduction of harvest all over Europe, Northern America and Argentina.

Production Networks and Spatial Economic Interdependence: An International Input-Output Analysis of the Asia-Pacific Region

The Asia-Pacific Region has enjoyed remarkable economic growth in the last three decades. This rapid economic growth can be partially attributed to the global spread of production networks, which has brought about major changes in spatial interdependence among economies within the region. By applying an Input-Output based spatial decomposition technique to the Asian International Input-Output Tables for 1985 and 2000, this paper not only analyzes the intrinsic mechanism of spatial economic interdependence, but also shows how value added, employment and CO2 emissions induced are distributed within the international production networks.

The variability and interdependence of spider viscid line tensile properties

True stress-true strain curves of naturally spun viscid line fibers retrieved directly from the spiral of orb-webs built by Argiope trifasciata spiders were measured using a novel methodology. This new procedure combines a method for removing the aqueous coating of the fibers and a technique that allows the accurate measurement of their cross sectional area. Comparison of the tensile behaviour of different samples indicates that naturally spun viscid lines show a large variability, comparable to that of other silks, such as major ampullate gland silk and silkworm silk. Nevertheless, application of a statistical analysis allowed identifying two independent parameters that underlie the variability and characterize the observed range of true stress-true strain curves. Combination of this result with previous mechanical and microstructural data suggested the assignment of these two independent effects to the degree of alignment of the protein chains and to the local relative humidity which, in turn, depends on the composition of the viscous coating and on the external environmental conditions.

Horizontal and Vertical Interdependence in the Multinational Subsidiary Networks. ACES Working Paper No. 7, July 2008

Existing theoretical studies have predicted that a multinational firm's location choices are interdependent across countries. Little has, however, been done to test the hypothesis at individual subsidiary level. This paper uses a detailed French multinational subsidiary dataset and estimates how a firm's decision to invest in a foreign country is not only conditional on the characteristics of that country but also the firm's existing subsidiary network Using a structural spatial econometric model, the paper finds evidence of both horizontal and vertical interdependence in multinationals' location decisions. The results indicate that while multinational firms have little incentive to duplicate their production in countries with low bilateral trade costs, they are motivated to build a vertical subsidiary network in these countries ~ especially when the countries have complementary comparative advantages.