Trans-Pacific Economic Relations and US-China Business Cycles : Convergence within Asia versus US Economic Leadership
AbstractThis paper tests the hypothesis that the links and leadership/dependency relationships between the Peopleâ€™s Republic of China (PRC), the United States (US), and the other large Asian economies have changed over the past 20 years with the industrialization of the PRC economy. We use time-varying spectral methods to decompose the links between seven advanced Asian economies and the US. We find : (a) the links with the US have been weakening, while those within a bloc based on the PRC have strengthened; (b) that this is not newâ€”it has been happening since the 1980s, but has been partly reversed by the recent surge in trade; (c) that there are two blocs within the Asian economic area : one based on Japan and the Republic of Korea and the other on the PRC and her satellites; (d) that product composition is responsible for this division (and for some movement between the blocs); and (e) that the links between the PRC and the US are rather complex, with the US able to shape the cycles elsewhere through her control of monetary conditions, but the PRC able to control the size of the cycles at home and (to some extent) abroad.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Development Economics Working Papers with number 23244.
Date of creation: Jun 2011
Date of revision:
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More information through EDIRC
dependency relationships; leadership relationships; the PRC; the US; Trans-Pacific Economic Relation; US-China Business Cycles;
Other versions of this item:
- Hallett, Andrew Hughes & Richter, Christian, 2011. "Trans-Pacific Economic Relations and US-China Business Cycles: Convergence within Asia versus US Economic Leadership," ADBI Working Papers 292, Asian Development Bank Institute.
- Andrew Hughes Hallett & Christian Richter, 2011. "Trans-Pacific Economic Relations and US-China Business Cycles : Convergence within Asia versus US Economic Leadership," Governance Working Papers 23244, East Asian Bureau of Economic Research.
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- C29 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Other
- C49 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Other
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O49 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-21 (All new papers)
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