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The Political Relation and Trade - The Case of US, China and Australia

Author

Listed:
  • Yifei Cai

    (Macau University of Science and Technology)

  • Jamel Saadaoui

    (University of Strasbourg)

  • Yanrui Wu

    (Business School, The University of Western Australia)

Abstract

This paper employs structural vector autoregression and local projection methods to examine the impacts of the deterioration in US-China political relations on Australia-China bilateral trade. By imposing a recursive identification scheme with different assumptions, the empirical results illustrate that worsening US-China political relations have a negative impact on Australian exports to and imports from China. Under a time-varying structural vector autoregression model, it is found that the deterioration in US-China political relations augments the negative impacts on Australia-China bilateral trade during the Trump’s administration. The empirical findings provide insightful policy suggestions to both Australian and Chinese governments.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Yifei Cai & Jamel Saadaoui & Yanrui Wu, 2022. "The Political Relation and Trade - The Case of US, China and Australia," Economics Discussion / Working Papers 22-06, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:22-06
    Note: MD5 = 6b5cc4e2812410b455ceb23712fc3a4f
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Structural vector autoregression; Local projection; Impulse response; US-China political relation; Australia-China trade;
    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
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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