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Nexus between Economic Stability and Political Stability in China and Japan

Author

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  • Vedat Yorucu

    (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus, Mersin-10, Turkey)

  • Dervis Kirikkaleli

    (Department of Banking and Finance, Faculty of Economic and Administrative Sciences, European University of Lefke, Lefke, Northern Cyprus, Mersin-10, Turkey)

Abstract

This research aims to investigate the causal relationship between economic stability and political stability for Japanese and Chinese markets. Based on the study’s aims, time domain causality tests - Granger causality, Toda-Yamamoto causality, and nonlinear Diks-Panchenko causality - and a frequency domain causality test - spectral Breitung and Candelon causality - are employed. The outcomes of the time domain causality tests reveal that there is feedback causality between political stability and economic stability in both countries, indicating that political stability is an important predictor for economic stability in both countries and vice versa.

Suggested Citation

  • Vedat Yorucu & Dervis Kirikkaleli, 2021. "Nexus between Economic Stability and Political Stability in China and Japan," Economic Research Guardian, Weissberg Publishing, vol. 11(2), pages 182-193, December.
    • Handle: RePEc:wei:journl:v:11:y:2021:i:2:p:182-193
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    References listed on IDEAS

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    6. Benhabib, Jess & Rustichini, Aldo, 1996. "Social Conflict and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 125-142, March.
    7. Aisen, Ari & Veiga, Francisco José, 2013. "How does political instability affect economic growth?," European Journal of Political Economy, Elsevier, vol. 29(C), pages 151-167.
    8. Breitung, Jorg & Candelon, Bertrand, 2006. "Testing for short- and long-run causality: A frequency-domain approach," Journal of Econometrics, Elsevier, vol. 132(2), pages 363-378, June.
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    Cited by:

    1. Adebayo, Tomiwa Sunday & AbdulKareem, Hauwah K.K. & Bilal, & Kirikkaleli, Dervis & Shah, Muhammad Ibrahim & Abbas, Shujaat, 2022. "CO2 behavior amidst the COVID-19 pandemic in the United Kingdom: The role of renewable and non-renewable energy development," Renewable Energy, Elsevier, vol. 189(C), pages 492-501.

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    More about this item

    Keywords

    Political Stability; Economic Stability; Frequency Domain Causality; China; Japan;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General

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