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How Do The Trans-Pacific Economies Affect The Usa? An Industrial Sector Approach, Takeshi Yagihashi, David D. Selover
How Do The Trans-Pacific Economies Affect The Usa? An Industrial Sector Approach, Takeshi Yagihashi, David D. Selover
Economics Faculty Publications
This paper studies how the Trans-Pacific region affects the US economy in terms of business cycle transmission. We use a large data set consisting of disaggregated sectoral industrial production indexes from selected countries in the region and employ a factor-augmented vector autoregression (FAVAR) approach to analyze the transmission of shocks in different industries. We find that a positive output shock in the entire Trans-Pacific region has positive effects on the majority of US manufacturing sectors. We also find that sectoral shocks in five sectors of the Trans-Pacific region have a large impact on the overall US economy. Three of the …