Trans-Pacific Economic Relations and US-China Business Cycles : Convergence within Asia versus US Economic Leadership
This 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.
|Date of creation:||Jun 2011|
|Date of revision:|
|Contact details of provider:|| Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200|
Web page: http://www.eaber.org
More information through EDIRC
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.:
- Tony Cavoli & Ramkishen S. Rajan, 2007. "Exploring the Case for Monetary Integration between the Chinese Mainland and Hong Kong," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 15(4), pages 17-34.
- Artis, Michael J & Zhang, W, 1997.
"International Business Cycles and the ERM: Is There a European Business Cycle?,"
International Journal of Finance & Economics,
John Wiley & Sons, Ltd., vol. 2(1), pages 1-16, January.
- Artis, Michael J & Zhang, Wenda, 1995. "International Business Cycles and the ERM: Is there a European Business Cycle?," CEPR Discussion Papers 1191, C.E.P.R. Discussion Papers.
- Kiyotaka Sato & Zhaoyong Zhang, 2006. "Real Output Co-movements in East Asia: Any Evidence for a Monetary Union?," The World Economy, Wiley Blackwell, vol. 29(12), pages 1671-1689, December.
- Canova, Fabio, 1993.
"Detrending and Business Cycle Facts,"
CEPR Discussion Papers
782, C.E.P.R. Discussion Papers.
- Evzen Kocenda & Jan Hanousek, 1998. "Integration of Emergency Equity Markets: Major Asian Players," Korean Economic Review, Korean Economic Association, vol. 14, pages 99-113.
- Robert J. Barro & Xavier Sala-i-Martin, 1991.
"Convergence across States and Regions,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
- Barro, Robert J & Sala-i-Martin, Xavier, 1992.
Journal of Political Economy,
University of Chicago Press, vol. 100(2), pages 223-51, April.
- Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence Across States and Regions," Papers 629, Yale - Economic Growth Center.
- Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence," Papers 645, Yale - Economic Growth Center.
- Barro, Robert J. & Sala-i-Martin, Xavier, 1992. "Convergence," Scholarly Articles 3451299, Harvard University Department of Economics.
- Kehoe, Patrick, 2005. "Comment on: "Determinants of business cycle comovement: a robust analysis"," Journal of Monetary Economics, Elsevier, vol. 52(1), pages 159-162, January.
- Jarko Fidrmuc & Iikka Korhonen & Ivana Bátorová, 2013.
"China in the World Economy: Dynamic Correlation Analysis of Business Cycles,"
CESifo Economic Studies,
CESifo, vol. 59(2), pages 392-411, June.
- Fidrmuc, Jarko & Korhonen, Iikka & Bátorová, Ivana, 2008. "China in the world economy : dynamic correlation analysis of business cycles," BOFIT Discussion Papers 7/2008, Bank of Finland, Institute for Economies in Transition.
- Fidrmuc, Jarko & Batorova, Ivana, 2008. "China in the World Economy: Dynamic Correlation Analysis of Business Cycles," Working Paper Series RP2008/02, World Institute for Development Economic Research (UNU-WIDER).
- Kwanho Shin & Chan-Hyun Sohn, 2006. "Trade and Financial Integration in East Asia: Effects on Co-movements," The World Economy, Wiley Blackwell, vol. 29(12), pages 1649-1669, December.
- Andrew Hughes Hallett, Christian R Richter, 2001.
"Spectral Analysis as a Tool for Financial Policy: An Analysis of the Short-End of the British Term Structure,"
Computing in Economics and Finance 2001
127, Society for Computational Economics.
- Andrew Hughes Hallett & Christian R. Richter, 2004. "Spectral Analysis as a Tool for Financial Policy: An Analysis of the Short-End of the British Term Structure," Computational Economics, Society for Computational Economics, vol. 23(3), pages 271-288, 04.
- Marianne Baxter & Michael A. Kouparitsas, 2004.
"Determinants of Business Cycle Comovement: A Robust Analysis,"
NBER Working Papers
10725, National Bureau of Economic Research, Inc.
- Baxter, Marianne & Kouparitsas, Michael A., 2005. "Determinants of business cycle comovement: a robust analysis," Journal of Monetary Economics, Elsevier, vol. 52(1), pages 113-157, January.
- Marianne Baxter & Michael A. Kouparitsas, 2004. "Determinants of business cycle comovement: a robust analysis," Working Paper Series WP-04-14, Federal Reserve Bank of Chicago.
- Shin, Kwanho & Wang, Yunjong, 2004. "Trade integration and business cycle co-movements: the case of Korea with other Asian countries," Japan and the World Economy, Elsevier, vol. 16(2), pages 213-230, April.
- Kalemli-Ozcan, Sebnem & Sorensen, Bent E. & Yosha, Oved, 2001. "Economic integration, industrial specialization, and the asymmetry of macroeconomic fluctuations," Journal of International Economics, Elsevier, vol. 55(1), pages 107-137, October.
- Andrew Hughes Hallett & Christian Richter, 2009. "Economics in the Backyard: How Much Convergence is there between China and her Special Regions?," The World Economy, Wiley Blackwell, vol. 32(6), pages 819-861, 06.
- Vladimir Chaplygin & Andrew Hughes Hallett & Christian Richter, 2006. "Monetary integration in the ex-Soviet Union: A 'union of four'? ," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(1), pages 47-68, 03.
- Evans, Paul & Karras, Georgios, 1996. "Convergence revisited," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 249-265, April.
- N. Gregory Mankiw & David Romer & David N. Weil, 1992.
"A Contribution to the Empirics of Economic Growth,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 107(2), pages 407-437.
- Canova, Fabio, 1998. "Detrending and business cycle facts: A user's guide," Journal of Monetary Economics, Elsevier, vol. 41(3), pages 533-540, May.
- Robert Inklaar & Jakob de Haan, 2000. "Is there Really a European Business Cycle?," CESifo Working Paper Series 268, CESifo Group Munich.
- Gerlach, Stefan, 1989. "Information, persistence, and real business cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 13(2), pages 187-199, April.
- Harding, Don & Pagan, Adrian, 2001. "Extracting, Using and Analysing Cyclical Information," MPRA Paper 15, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:eab:govern:23244. 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: (Shiro Armstrong)
If references are entirely missing, you can add them using this form.