The rest of the chapter is organized as follows. Section 2 lays out the basic argument in a standard general equilibrium framework, while Section 3 examines key welfare effects of joint production in a partial equilibrium framework. Section 4 studies the effect of production sharing on the exchange-rate sensitivity of trade and discusses alternative measurements of the balance of trade. Section 5 deals with the real-exchange-rate effects of an investment cycle associated with the implementation of joint production. Section 6 considers exchange-rate regime choice. Section 7 concludes.
© 2004 Edward Elgar Publishing Ltd.
Arndt, Sven. “Global Production Networks and Regional Integration,” in M. Plummer (ed.), Empirical Methods in International Trade (Northampton, MA: Edward Elgar, 2004a): 129-142. http://www.e-elgar.com/