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A dynamic analysis of the impact of uncertainty on import- and/or export-led growth: The experience of Japan and the Asian Tigers

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  • Mahadevan, Renuka
  • Suardi, Sandy

Abstract

Increasing integration of the Asian Tigers with the world economy through trade has exposed their income and trade to greater uncertainty and volatility. This paper models uncertainty in trade and income and re-examines the stability of the trade-growth nexus for Japan and the Asian Tigers in a dynamic framework. We find that in a volatile environment Japan's GDP growth is only import-led while Hong Kong's GDP growth is both export and import growth-led. On the other hand, incorporating uncertainty breaks the causal link between Korea's GDP growth and trade but it does not affect Taiwan's mutually causative relationship between GDP growth, with exports and imports. Lastly, the varied qualitative and quantitative impact of volatility in imports and exports on income growth among the Asian Tigers provides further thought for policy making.

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Bibliographic Info

Article provided by Elsevier in its journal Japan and the World Economy.

Volume (Year): 20 (2008)
Issue (Month): 2 (March)
Pages: 155-174

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Handle: RePEc:eee:japwor:v:20:y:2008:i:2:p:155-174

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Web page: http://www.elsevier.com/locate/inca/505557

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Cited by:
  1. Islam, Faridul & Adnan Hye, Qazi Muhammad & Shahbaz, Muhammad, 2011. "Imports-economic growth nexus: ARDL approach to cointegration," MPRA Paper 28462, University Library of Munich, Germany.
  2. Baharom, A.H. & Habibullah, M.S. & Royfaizal, R. C, 2008. "The relationship between trade openness, foreign direct investment and growth: Case of Malaysia," MPRA Paper 11928, University Library of Munich, Germany.
  3. Jaime Andrés Collazos & Pedro Luis Rosero, 2010. "¿Posee el Valle del Cauca una economía transformadora de importaciones orientadas a la Exportación?," DOCUMENTOS DE POLÍTICAS PÚBLICAS 006880, UNIVERSIDAD ICESI.

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