New Asian Regionalism: Evidence of ASEAN+3 Free Trade Agreement From Extended Gravity Theory and New Modelling Approach

Tran Van Hoa
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Tran Van Hoa: University of Wollongong, http://business.uow.edu.au/econ/who/index.html
Authors registered in the RePEc Author Service: Van Hoa Tran and Van Hoa Tran ()

Economics Working Papers from School of Economics, University of Wollongong, NSW, Australia

Abstract: The emergence of new Asian regionalisms such as ASEAN+3 (China, Korea and Japan) and the proposed ASEAN+5 (ASEAN+3 plus Australia and New Zealand) and other bilateral, plurilateral and multilateral free trade agreements in recent years requires research into these important developments and their underlying fundamental trade-growth causation. The paper extends the gravity theory to time-series data and applies a new flexible modelling approach to construct a simultaneous-equation model of trade and growth for the ASEAN and the East Asia 3. Using data from the World Bank national accounts and CHELEM regional and international trade over the period 1968-2000, the paper then estimates the model by both standard (OLS and 2SLS) and improved estimation methods to provide superior MSE impact estimates. Implications of the findings for ASEAN+3’s economic integration, trade policy and prospects for trade and welfare improvement for this FTA will also be discussed.

Keywords: New Asian Regionalism; Free Trade Agreement; Economic Integration; ASEAN; ASEAN+3; Trade and Growth; Gravity Theory; Causality; Economic Modelling; Estimation Methods; Economic and Trade Policy (search for similar items in EconPapers)
JEL-codes: C32 C51 C52 F02 F14 F15 F42 O11 O41 O53 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2003
New Economics Papers: this item is included in nep-dev and nep-sea
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Citations: View citations in EconPapers (4)

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