The Ties that Bind Asia, Europe, and United States

Soyoung Kim, Jong-Wha Lee and Cyn-Young Park ()

No 192, ADB Economics Working Paper Series from Asian Development Bank

Abstract: We investigate changes in Asia’s regional and global trade linkages and their influence on macroeconomic relationships among Asia, Europe, and United States (US). We first document changes in trade patterns of East Asia, Europe, and US and discuss stylized facts about East Asia’s trade structure. The People’s Republic of China (PRC) plays a critical role as an assembly and production center in rapidly expanding intra-Asian trade. However, the PRC’s trade share in parts and components with Europe and the US is rising, suggesting that the region’s production chains are increasingly integrated into the global business network. Empirical results from a panel vector auto-regression model generally confirm the positive effect of growing intra-Asian trade on both regional and global output comovements, reflecting the nature of intra-Asian trade that is heavily driven by external demand. However, macroeconomic interdependence among East Asia, Europe, and US is becoming more bidirectional, as shown by the positive effect of the East Asian aggregate output shock on both European and US outputs. The findings suggest a future role for Asia as an increasingly important trade partner and balancing power in the world economy.

Keywords: trade integration; decoupling; economic interdependence; East Asia; China; panel VAR (search for similar items in EconPapers)
JEL-codes: E32 F15 O19 O53 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2010-02
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.adb.org/publications/ties-bind-asia-europe-and-united-states Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0192

Access Statistics for this paper

More papers in ADB Economics Working Paper Series from Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. Contact information at EDIRC.
Bibliographic data for series maintained by Orlee Velarde ().