IDEAS home Printed from https://ideas.repec.org/h/nbr/nberch/7834.html
   My bibliography  Save this book chapter

Is Japan Creating a Yen Bloc in East Asia and the Pacific?

In: Regionalism and Rivalry: Japan and the United States in Pacific Asia

Author

Listed:
  • Jeffrey A. Frankel

Abstract

This paper reaches seven conclusions regarding the Yen Bloc that Japan is reputed to be forming in Pacific Asia. (1) Gravity-model estimates of bilateral trade show that the level of trade in East Asia is biased intra-regionally, as it is within the European Community and within the Western Hemisphere, to a greater extent than can be explained naturally by distance. One might call these three regions 'super-natural' blocs, in contrast to Krugman's "natural" trade blocs. (2) There is no evidence of a special Japan effect. (3) Once one properly accounts for rapid growth in Asia, the statistics do not bear out a trend toward intra-regional bias of trade flows. (4) The world's strongest trade grouping is the one that includes the U.S. and Canada with the Asian/Pacific countries, i.e., APEC. (5) There is a bit more evidence of rising Japanese influence in East Asia's financial markets. Tokyo appears to have acquired significant influence over interest rates in a few Asian countries, though overall its influence is as yet no greater than that of New York. (6) Some of Japan's financial and monetary influence takes place through a growing role for the yen, at the expense of the dollar, The yen has become relatively more important in exchange rate policies and invoicing of trade and finance in the region. (7) But this trend is less the outcome of Japanese policy-makers' wishes, than of pressure from the U.S. government to internationalize the yen.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrow
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Jeffrey A. Frankel, 1993. "Is Japan Creating a Yen Bloc in East Asia and the Pacific?," NBER Chapters, in: Regionalism and Rivalry: Japan and the United States in Pacific Asia, pages 53-88, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:7834
    as

    Download full text from publisher

    File URL: http://www.nber.org/chapters/c7834.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lawrence, R.Z., 1991. "An Analysis of Japanese Trade with developing Countries," Papers 87, Brookings Institution - Working Papers.
    2. Wang, Z.K., 1992. "China's Potential Trade : An Analysis Based on the Gravity Model," Discussion Papers 92-24, Department of Economics, University of Birmingham.
    3. Mohsin S. Khan, 1985. "An Analytical Approach to Interest Rate Determination in Developing Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 24(3-4), pages 481-495.
    4. Hamilton, C.B. & Winters, L.A., 1992. "Opening Up International Trade in Eastern Europe," Papers 511, Stockholm - International Economic Studies.
    5. Mr. Hamid Faruqee, 1991. "Dynamic Capital Mobility in Pacific Basin Developing Countries: Estimation and Policy Implications," IMF Working Papers 1991/115, International Monetary Fund.
    6. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
    7. Jeffrey J. Schott, 1991. "Trading Blocs and the World Trading System," The World Economy, Wiley Blackwell, vol. 14(1), pages 1-18, March.
    8. Jeffrey A. Frankel, 1991. "The Japanese Cost of Finance: A Survey," Financial Management, Financial Management Association, vol. 20(1), Spring.
    9. Menzie D. Chinn & Jeffrey A. Frankel, 1992. "Financial links around the Pacific Rim, 1982-1992," Proceedings, Federal Reserve Bank of San Francisco, issue Sep.
    10. Sebastian Edwards & Mohsin S. Khan, 1985. "Interest Rate Determination in Developing Countries: A Conceptual Framework (Détermination du taux d'intérêt dans les pays en développement: cadre théorique) (Determinación de los tipos de inter," IMF Staff Papers, Palgrave Macmillan, vol. 32(3), pages 377-403, September.
    11. Fukao, Mitsuhiro & Okubo, Takashi, 1984. "International Linkage of Interest Rates: The Case of Japan and the United States," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(1), pages 193-207, February.
    12. Norman S. Fieleke, 1992. "One trading world, or many: the issue of regional trading blocs," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 3-20.
    13. Wang, Zhen Kun & Winters, L. Alan, 1991. "The Trading Potential of Eastern Europe," CEPR Discussion Papers 610, C.E.P.R. Discussion Papers.
    14. Marcus Noland, 1997. "Public Policy, Private Preferences, And The Japanese Trade Pattern," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 259-266, May.
    15. Mr. George S Tavlas & Yusuru Ozeki, 1991. "The Japanese Yen as an International Currency," IMF Working Papers 1991/002, International Monetary Fund.
    16. Yusuru Ozeki & Mr. George S Tavlas, 1992. "The Internationalization of Currencies: An Appraisal of the Japanese Yen," IMF Occasional Papers 1992/001, International Monetary Fund.
    17. Helpman, Elhanan, 1987. "Imperfect competition and international trade : Opening remarks," European Economic Review, Elsevier, vol. 31(1-2), pages 77-81.
    18. Gary R. Saxonhouse, 1989. "Differentiated Products, Economies of Scale, and Access to the Japanese Market," NBER Chapters, in: Trade Policies for International Competitiveness, pages 145-184, National Bureau of Economic Research, Inc.
    19. Peter A. Petri, 1991. "Market Structure, Comparative Advantage, and Japanese Trade under the Strong Yen," NBER Chapters, in: Trade with Japan: Has the Door Opened Wider?, pages 51-84, National Bureau of Economic Research, Inc.
    20. Takatoshi Ito, 1983. "Capital Controls and Covered Interest Parity," NBER Working Papers 1187, National Bureau of Economic Research, Inc.
    21. Sebastian Edwards & Mohsin S. Khan, 1985. "Interest Rate Determination in Developing Countries: A Conceptual Framework," NBER Working Papers 1531, National Bureau of Economic Research, Inc.
    22. Glick, Reuven & Hutchison, Michael, 1990. "Financial liberalization in the Pacific Basin: Implications for real interest rate linkages," Journal of the Japanese and International Economies, Elsevier, vol. 4(1), pages 36-48, March.
    23. Ito, Takatoshi, 1988. "Use of (Time-Domain) Vector Autoregressions to Test Uncovered Interest Parity," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 296-305, May.
    24. Deardorff, Alan V., 1984. "Testing trade theories and predicting trade flows," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 10, pages 467-517, Elsevier.
    25. Feenstra, Robert C. (ed.), 1989. "Trade Policies for International Competitiveness," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226239491, December.
    26. Robert C. Feenstra, 1989. "Trade Policies for International Competitiveness," NBER Books, National Bureau of Economic Research, Inc, number feen89-1, February.
    27. Tom Jackson, 1991. "A game model of ASEAN trade liberalization," Open Economies Review, Springer, vol. 2(3), pages 237-254, October.
    28. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    29. Paul Krugman, 1991. "Trade with Japan: Has the Door Opened Wider?," NBER Books, National Bureau of Economic Research, Inc, number krug91-1, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jeffrey A Frankel, 1993. "Is there a Currency Bloc in the Pacific?," RBA Annual Conference Volume (Discontinued), in: Adrian Blundell-Wignall (ed.),The Exchange Rate, International Trade and the Balance of Payments, Reserve Bank of Australia.
    2. Jeffrey A. Frankel & Shang-Jin Wei, 1994. "Yen Bloc or Dollar Bloc? Exchange Rate Policies of the East Asian Economies," NBER Chapters, in: Macroeconomic Linkage: Savings, Exchange Rates, and Capital Flows, pages 295-333, National Bureau of Economic Research, Inc.
    3. Jeffrey A. Frankel & Shang-Jin Wei, 1993. "Emerging Currency Blocs," NBER Working Papers 4335, National Bureau of Economic Research, Inc.
    4. Frankel, Jeffrey & Stein, Ernesto & Wei, Shang-jin, 1995. "Trading blocs and the Americas: The natural, the unnatural, and the super-natural," Journal of Development Economics, Elsevier, vol. 47(1), pages 61-95, June.
    5. Simon J. Evenett & Wolfgang Keller, 2002. "On Theories Explaining the Success of the Gravity Equation," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 281-316, April.
    6. Jeffrey A. Frankel & Ernesto Stein & Shang-Jin Wei, 1998. "Continental Trading Blocs: Are They Natural or Supernatural?," NBER Chapters, in: The Regionalization of the World Economy, pages 91-120, National Bureau of Economic Research, Inc.
    7. Peter Egger, 2000. "Teilprojekt 4: Bilaterale Wirtschaftsbeziehungen zwischen der EU und ausgewählten mittel- und osteuropäischen Ländern (MOEL): Entwicklungen der letzten Jahre und Versuch einer Prognose," WIFO Studies, WIFO, number 19262, February.
    8. Paas, Tiiu, 2002. "Gravity Approach for Exploring Baltic Sea Regional Integration in the Field of International Trade," Discussion Paper Series 26379, Hamburg Institute of International Economics.
    9. Lee, Hiro & Roland-Holst, David W., 1998. "Prelude to the pacific century: Overview of the region, leading issues, and methodology," MPRA Paper 82339, University Library of Munich, Germany.
    10. Jeffrey A. Frankel., 1992. "The Evolving Japanese Financial System, and the Cost of Capital," Center for International and Development Economics Research (CIDER) Working Papers C92-002, University of California at Berkeley.
    11. J. Peter Neary, 2009. "Putting the “New” into New Trade Theory: Paul Krugman's Nobel Memorial Prize in Economics," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(2), pages 217-250, June.
    12. Yilmazkuday, Hakan, 2009. "Distribution of Consumption, Production and Trade within the U.S," MPRA Paper 16361, University Library of Munich, Germany.
    13. Raúl Serrano & Vicente Pinilla, 2014. "New directions of trade for the agri-food industry: a disaggregated approach for different income countries, 1963–2000," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 23(1), pages 1-22, December.
    14. Peter Egger, 1998. "Exportpotentiale zwischen Österreich und den benachbarten MOEL. Simulationsergebnisse aus einem panelökonometrischen Gravitationsmodell," WIFO Monatsberichte (monthly reports), WIFO, vol. 71(11), pages 751-759, November.
    15. Jeffrey A. Frankel, 1997. "Sterilization of money inflows: Difficult (Calvo) or Easy (Reisen)?," Estudios de Economia, University of Chile, Department of Economics, vol. 24(2 Year 19), pages 263-285, December.
    16. Caporale, Guglielmo Maria & Sova, Anamaria & Sova, Robert, 2015. "Trade flows and trade specialisation: The case of China," China Economic Review, Elsevier, vol. 34(C), pages 261-273.
    17. Kandogan, Yener, 2009. "A Gravity Model for Components of Imports," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 5(1-2), pages 1-17, April.
    18. Yongcheol Shin & Laura Serlenga, 2004. "Gravity Models of the Intra-EU Trade: Application of the Hausman-Taylor Estimation in Heterogeneous Panels with Common Time-specific Factors," Econometric Society 2004 Far Eastern Meetings 671, Econometric Society.
    19. Phylaktis, Kate, 1997. "Capital market integration in the Pacific-Basin region: An analysis of real interest rate linkages," Pacific-Basin Finance Journal, Elsevier, vol. 5(2), pages 195-213, June.
    20. Phylaktis, Kate, 1999. "Capital market integration in the Pacific Basin region: an impulse response analysis," Journal of International Money and Finance, Elsevier, vol. 18(2), pages 267-287, February.

    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberch:7834. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.