Structural Breaks in Trade and Income Per Capita in Asean - 5 Countries: An Application of Innovational Outlier Models

10 Pages Posted: 24 Nov 2008

See all articles by Kankesu Jayanthakumaran

Kankesu Jayanthakumaran

University of Wollongong - Department of Economics

Mosayeb Pahlavani

University of Wollongong - School of Economics and Information Systems

Date Written: November 23, 2008

Abstract

The founder members of the Association of Southeast Asian Nations (ASEAN-5) - Malaysia, Indonesia, Thailand, the Philippines and Singapore - increasingly adopted outward-oriented policies in trade and investment by enforcing reforms in the mid-1980s. This paper investigates the existence of endogenously determined structural breaks of the trade and income per capita by using historical time series data during the period from 1970 to 2003 for the ASEAN-5 by applying an Innovational Outliner (IO) model in the presence of a potential structural break. We find that significant structural breaks occurred for trade per capita in the mid-1980s, which coincides with the recession in the region. We also find that significant structural breaks occurred for Gross National Income (GNI) per capita in 1997, which coincides with the Asian crisis. The Philippines experienced structural breaks in 1985, which coincides with a recession.

Keywords: Trade and GDP per capita, IO model, structural break, ASEAN countries

JEL Classification: C32, F15, O40

Suggested Citation

Jayanthakumaran, Kankesu and Pahlavani, Mosayeb, Structural Breaks in Trade and Income Per Capita in Asean - 5 Countries: An Application of Innovational Outlier Models (November 23, 2008). Applied Econometrics and International Development, Vol. 7, No. 2, 2007, Available at SSRN: https://ssrn.com/abstract=1305922

Kankesu Jayanthakumaran

University of Wollongong - Department of Economics ( email )

Northfields Avenue
Wollongong, New South Wales 2522
Australia

Mosayeb Pahlavani (Contact Author)

University of Wollongong - School of Economics and Information Systems ( email )

Wollongong, NSW 2522
Australia

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