Advanced Search
MyIDEAS: Login

What Happens to Japan if China Catches Cold? - A causal analysis of the Chinese growth and the Japanese growth

Contents:

Author Info

  • Chen Pu

    (Bielefeld University)

  • Hsiao Chihying

    (Bielefeld University)

Abstract

Many economic professionals like financial analysts, economic journalists and regulatory officers prevailingly regard the fast growth of the Chinese economy as the key factor that leads recently the Japanese economy to recover from the recession that started since beginning of the nineties. This judgement are mostly underpinned by statistical facts that the Chinese economy grew fast in the last two years; the Japanese export to China has experienced a dramatically increase during last two years, China has become now the biggest foreign trade partner of Japan and so on. However, this convincingly sounding arguments are not sufficient to conclude the statement that the Chinese growth leads Japan out of the recession. In fact the statement has essentially a causal character, which means both the interdependence and the directionality of the dependence. While the positive dependence/correlation between the Chinese economy and the Japanese economy is often explicitly documented by statistical facts, arguments about the directionality of the dependence are totally missing. In this paper we conduct an empirical study to investigate the directionality of the dependence in order to justify the statement empirically. Taking a probabilistic causal approach, we infer the causal dependence among the Japanese economy and the Chinese economy based on observed data. We find the evidence that the Chinese growth on average has been a positive cause of the Japanese since the later nineties and the temporary positive casual effect is even more pronounced.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://128.118.178.162/eps/em/papers/0510/0510005.pdf
Download Restriction: no

Bibliographic Info

Paper provided by EconWPA in its series Econometrics with number 0510005.

as in new window
Length: 25 pages
Date of creation: 29 Oct 2005
Date of revision:
Handle: RePEc:wpa:wuwpem:0510005

Note: Type of Document - pdf; pages: 25
Contact details of provider:
Web page: http://128.118.178.162

Related research

Keywords: Inferred Causality; Recovery of the Japanese economy; China Japan relation;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Hoover, Kevin D., 2005. "Automatic Inference Of The Contemporaneous Causal Order Of A System Of Equations," Econometric Theory, Cambridge University Press, vol. 21(01), pages 69-77, February.
  2. Pu Chen & Peter Flaschel, 2005. "Keynesian Dynamics and the Wage–Price Spiral: Identifying Downward Rigidities," Computational Economics, Society for Computational Economics, vol. 25(1), pages 115-142, February.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpem:0510005. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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