Economic integration of major industrialized areas: An empirical tracking of the continued trend

Globalization and economic integration in a regional scale is a global tren d. This paper tracked an empirical aspect of this evolutionary trend by usi ng wage data of different industrialized countries with the BLS (Bureau of Labor Statistics) data and cluster and discriminant analysis applied to tim e series data of wage changes. Results acquired clearly showed an evolution ary development of economic blocs, and industry level cluster results also reflected tight integration, while some industries presented their distinct patterns of development. With discriminant analysis at the aggregate level , the major determinant that affected the integration during 1985 and 1995 period was the changes in U.S. money and quasi-money supply. This paper pre sents that globalization has led to two aspects of consequences. On the one hand, it means that all countries, and most of all industries, are affecte d by either a single or a few number of macroeconomic indicator(s). At the same time, on the other hand, globalization implies that due to the existen ce of factor conditions [1], within-group and between-group variances do ex ist. In other words, each country and each industry in different groups wou ld feature divergent performance. (C) 2001 Elsevier Science Inc.