Study On The Macroeconomic Dynamic Impact On Sino-Japan-Korea And Transmission Mechanism Of Exogenous Shocks

China, Japan and South Korea plays an increasingly important role on the stageof east Asia and even the world.In the open economy，the linkages among the threeeconomies are closer and closer. Rapid development of transnational investment,foreign trade and other economic activities make the business cycle of the threeeconomies co-movement.Exogenous shocks including the price fluctuation ofthe international oil market affect on the business cycle of China, Japan and SouthKorea increasingly. Under this background, to investigate the business cycleco-movement of the three economies, the characteristics of each economicperformance, transmission mechanism of economic fluctuations, observe the externalenvironment of China’s economy, utilize positive impact of the regional economiccycle and avoid negative impact of the regional economic cycle, achieve asteady and relatively fast growth of china economy, which is of importanttheoretical and practical significance.This paper reviewed the domestic and foreign research results, In open economy,International trade channel, foreign direct investment channel and exchange ratechannel are the main transmission channel among economies of the business cyclefluctuations and exogenous shocks. In order to make the empirical results of globalvector autoregressive model make sense in economic theory, the results of theempirical research more convincing, we analysis the transmission of the three kindsof channel respectively.described the trilateral economic and trade activities clearlywith statistical data. We establish a game model and a mathematics model of regionaloptimal currency area among the three countries. The results of the Game modelshow that the three country’s government must consider the interests of the collectivewhen make economic policy. Otherwise it will lead to the collective interests loss,which will eventually harm national own interests; Futhermore,the results of theoptimal currency area model shows, including China,Japan and South Korea,whether or not the East Asian countries to become the member of the optimumcurrency area’s subjective willingness depends on contrast of state utility before andafter the country joined the optimum currency area. If a country’s business cycle keep the same with countrys’ business cycle overall,which are members of the optimalcurrency area,the country’s subjective willingness to join the optimal currency area isstrong, and vice versa.Global vector autoregressive (Global VAR) model is based on the vector autoregression (VAR) model for developing the econometric model to analyze thelinkages among nations. In the description of global and regional business cyclefluctuation,which is of good applicability. This paper systematically introduces theglobal vector autoregressive (Global VAR) modeling methods and techniques. We useGlobal VAR model to analyze the China-Japan-ROK macroeconomic dynamicassociation and transmission of exogenous shock in the three countries. The resultsof GVR Model shows: China,Japan and South Korea economic interdependence, onecountry’s economic fluctuation will have an impact on the other two countries. Thetrilateral economic interdependence is asymmetric. There is significant positivecorrelation between South Korea economy and China’s economy. The Japaneseeconomy and China’s economy shows a positive correlation in some areas, a negativecorrelation in some other areas, dependence and competition coexist. The impact ofcrude oil prices and other exogenous shock to China,Japan and South Korea isasymmetric, it rose a larger impact on China and had a small effect on Japan andSouth Korea. In particular, the appreciation of the RMB have different degrees ofnegative effects on China,Japan and South Korea economy.The results of our paper show that: the three countries share extensive andcommon interests. The three country’s government ought to give full consideration tothe characteristics of interdependence of each country business cycle in theformulation of macroeconomic policies, develop extensive cooperation in politicalfields, economic fields and cultural fields, avoid cut-throat competition, seekcommon ground while reserving differences, expand common interests.