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Business Cycles in Japan and in Asian Countries : Tests of Comovements between CI and Trade Statistics

Author

Listed:
  • Konomi Tonogi

    (Officer, Economic and Social Research Institute, Cabinet Office, Government of Japan)

  • Katsuaki Ochiai

    (Associate Senior Economist, Japan Center for Economic Research)

  • Kazumi Asako

    (Professor, Hitotsubashi University)

Abstract

In this paper, we analyse the business cycle comovement among Asian countries and between them and Japan. The correlation statistics of quarterly GDP data confirm that the relationship among Asian countries and between these countries and Japan has been increasing since the 1997 Asian currency crisis. We then examine the similar comovement between Asian countries and Japan by observing the monthly CI (composite index) of business conditions and trade data on exports and imports. The results confirm a certain level of correlation when analyzing both aggregate imports and exports and imports and exports of individual goods. An important factor behind this correlation of trade with Asian countries and Japan may be a system of international fragmentation centered around process specialization between countries. The results of the verification conducted in this paper confirm a tendency for imports of goods qualified as intermediate goods from Asia to be a leading indicator of Japanese business conditions and suggest the possibility that trends in imports from Asia may be important information in forecasting domestic economic performance in Japan.

Suggested Citation

  • Konomi Tonogi & Katsuaki Ochiai & Kazumi Asako, 2010. "Business Cycles in Japan and in Asian Countries : Tests of Comovements between CI and Trade Statistics," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 6(2), pages 237-260, March.
    • Handle: RePEc:mof:journl:ppr008b
    as

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    File URL: http://warp.ndl.go.jp/info:ndljp/pid/9908001/www.mof.go.jp/english/pri/publication/pp_review/ppr008/ppr008b.pdf
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    Citations

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    Cited by:

    1. Kumano, Yusuke & Muto, Ichiro & Nakano, Akihiro, 2014. "What explains the recent fluctuations in Japan’s output? A structural factor analysis of Japan’s industrial production," Journal of the Japanese and International Economies, Elsevier, vol. 34(C), pages 135-153.

    More about this item

    Keywords

    correlation of business cycles; Asian economy; trade;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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