Gerald P. W. Simons

Monetary Integration in East Asia: Evidence from Real Effective Exchange Rates

This paper investigates the feasibility of forming a monetary union in East Asia by examining the cointegration and causality of the real effective exchange rates of local currencies. A “pentagon” group of five countries is found - South Korea, the Philippines, Thailand, Indonesia, and Malaysia - which may have potential for success for further monetary integration. Singapore is loosely tied to this group. The Greater China area - China, Hong Kong and Taiwan - does not show any significant degree of integration either internally or externally. Neither a yen bloc nor a US dollar bloc is forming in East Asia.

The effect of offshoring on knowledge flows in the US automobile industry

In the growing literature on offshoring, little attention has been given to the impact on product innovation. In this paper we empirically investigate the connection between industry innovation and offshoring in manufacturing. Specifically, our focus is on how information flows to the US economy have been affected by the increase in manufacturing offshoring in the US automobile industry. We measure these knowledge spillovers using different aspects of patent data, namely foreign citations and inventor country of origin. Our results indicate that offshoring has resulted in increased knowledge spillovers to the USA, and that the quantity of such spillovers varies by country, with a positive spillover effect from offshoring to Mexico, China, South Korea and Taiwan, but little or no spillover effect from offshoring to Canada, Japan, Germany, France, Italy and the UK.

Knowledge Spillovers and Local Industry Growth: A Patent Citation Approach

We create unique patent-based measures of Marshall–Arrow–Romer (MAR) and Jacobs knowledge spillovers using patent citations data and use them to test the Glaeser et al. model of local industry employment growth on three emerging technology categories, namely, computing and communications, drugs and medical, and electrics and electronics. We test growth in 45 U.S. metropolitan statistical areas (MSAs) and consolidated metropolitan statistical areas (CMSAs) for eight two-digit industries over the period 1994 to 2000. We find strong evidence for MAR spillovers from specialization, but little for Jacobs spillovers from diversity. Our results suggest that regional specialization, but not diversity, boosts local industry employment growth in these knowledge fields. JEL classifications: J21, L16