The ties that Bind Asia, Europe, and United States

Soyoung Kim, Jong-Wha Lee, Cyn Young Park

Research output: Contribution to journalArticle

3 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)1-35
Number of pages35
JournalADB Economics Working Paper Series
Volume192
Publication statusPublished - 2010 Aug 30
Externally publishedYes

Fingerprint

macroeconomics
vector autoregression
regional trade
global trade
world economy
interdependence
Europe
Asia
regression
China
demand
East Asia
effect
Macroeconomics
document
economy
world
Pattern of trade
Vector autoregression model
Empirical results

ASJC Scopus subject areas

  • Economics and Econometrics
  • Geography, Planning and Development
  • Political Science and International Relations

Cite this

The ties that Bind Asia, Europe, and United States. / Kim, Soyoung; Lee, Jong-Wha; Park, Cyn Young.

In: ADB Economics Working Paper Series, Vol. 192, 30.08.2010, p. 1-35.

Research output: Contribution to journalArticle

Kim, Soyoung ; Lee, Jong-Wha ; Park, Cyn Young. / The ties that Bind Asia, Europe, and United States. In: ADB Economics Working Paper Series. 2010 ; Vol. 192. pp. 1-35.
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