ECONOMIC GROWTH OF SELECTED EAST ASIAN COUNTRIES: A MACROECONOMIC VIEW OF THEIR DEPENDENCE ON THE US AND EUROPE

Eu Chye Tan and Chor Foon Tang
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Eu Chye Tan: Faculty of Economics & Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia

The Singapore Economic Review (SER), 2016, vol. 61, issue 05, 1-15

Abstract: This paper aims to ascertain whether direct macroeconomic linkages exist between some East Asian (EA) countries on the one hand and the United States (US) and Europe on the other, based upon quarterly real gross domestic product (GDP) series spanning from the early 1990s. Long-run and short-run lead-lag relations are explored within a trivariate modeling framework. Contrary to popular belief, the empirical evidence suggests generally either very nominal or no direct links at all between these EA countries and the US in terms of GDP. Direct links with Europe are completely ruled out. All these would allude to a very limited susceptibility of these EA economies to shocks in the US and Europe, barring a global economic crisis of catastrophic proportions. The growing belief that if China sneezes, the world catches the flu is also not borne out by the empirical results.

Keywords: Growth; cointegration; causality (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1142/S0217590815500666

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