Ties Binding Asia, Europe and the USA

23 Pages Posted: 14 Mar 2011

See all articles by Soyoung Kim

Soyoung Kim

Seoul National University

Jong-Wha Lee

Korea University

Cyn-Young Park

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 the USA. We first document changes in tripartite trade patterns and discuss stylized facts about East Asia's trade structure, with particular focus on the role of China. China plays a critical role in the rapidly expanding intra-Asian trade as an assembly and production center that supplies final goods for the advanced economies. However, China's trade shares in final goods with East Asia and in parts and components with Europe and the USA are rising, suggesting that the region's production chains are becoming increasingly integrated into the global business network. Empirical results from a panel vector autoregression model generally confirm increasingly mutual macroeconomic interdependence among East Asia, Europe and the USA. The findings suggest a future role for Asia as an important trade partner and balancing power in the world economy.

Keywords: East Asia, economic interdependence, panel VAR, trade integration

JEL Classification: E32, F15, O19, O53

Suggested Citation

Kim, Soyoung and Lee, Jong-Wha and Park, Cyn-Young, Ties Binding Asia, Europe and the USA. China & World Economy, Vol. 19, No. 1, pp. 24-46, 2011. Available at SSRN: https://ssrn.com/abstract=1784130 or http://dx.doi.org/10.1111/j.1749-124X.2011.01225.x

Soyoung Kim

Seoul National University ( email )

Kwanak-gu
Seoul, 151-742
Korea, Republic of (South Korea)

Jong-Wha Lee

Korea University ( email )

Anam-dong, Sungbuk-Ku
Dept. of Economics
Seoul, 136-701
82-2-3290-2216 (Phone)
82-2-928-4948 (Fax)

Cyn-Young Park

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines
(632) 632-5473 (Phone)

HOME PAGE: http://www.adb.org

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