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Interaction between trade, conflict and cooperation : the case of Japan and China

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  • Shiro Armstrong

    (Australia–Japan Research Centre)

Abstract

The complex interaction between trade and politics is analysed for the JapanChina relationship using Granger causality tests. The purpose is to determine the presence and direction of causation between trade and political events, both positive and negative, and to gauge an idea of the lag length of causality. Trade is growing quickly between Japan and China despite long standing political distance between the two countries. Results show that the economic relationship underpins and constrains the political relationship between Japan and China while an increase in positive political news and a decrease in negative political news promote trade to some degree.

Suggested Citation

  • Shiro Armstrong, 2010. "Interaction between trade, conflict and cooperation : the case of Japan and China," Trade Working Papers 22766, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:tradew:22766
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    File URL: http://www.eaber.org/node/22766
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    References listed on IDEAS

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    Cited by:

    1. Polachek Solomon W, 2011. "Current Research and Future Directions in Peace Economics: Trade Gone Awry," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(2), pages 1-14, January.

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    More about this item

    Keywords

    Conflict and Cooperation; trade; Granger Causality;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F10 - International Economics - - Trade - - - General
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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