Have US-Japan Trade Agreements Made a Difference?

Byron Scott Gangnes () and Craig Parsons
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Craig Parsons: Department of Economics, Yokohama National University

No 200403, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: The few existing empirical studies of U.S.-Japan trade agreements have relied primarily on descriptive statistics or univariate time series methods. We conduct a more powerful test by evaluating agreements in the context of well-specified econometric models. Consistent with trade theory, import demand is modeled as a cointegrating relationship with income and relative price variables, where a trade agreement may cause a structural break in the cointegrating vector. In several cases, we find evidence that market-opening trade agreements may have increased the volume of Japanese imports, while other agreements appear to have had no significant impact.

Keywords: Structural break test; U.S.-Japan trade agreements; import promotion policies (search for similar items in EconPapers)
JEL-codes: F13 F14 C32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-sea
Date: 2004-03
Note: Also Singapore Management University Economics and Statistics Working Paper No. 08-2004, March 2004
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Working Paper: Have U.S.-Japan Trade Agreements Made a Difference? (2004)
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