nep-sea New Economics Papers
on South East Asia
Issue of 2011‒12‒05
two papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Business Cycle, Currency and Trade, Revisited By Michael J. Artis; Toshihiro Okubo
  2. International Trade of Isolated Countries: The Case of Myanmar and North Korea By JINHWAN OH

  1. By: Michael J. Artis (University of Manchester and CEPR); Toshihiro Okubo (Keio University)
    Abstract: This paper reports estimates based on long-run data sets for GDP and trade, with three subsamples chosen to reflect the first globalization period, the "bloc economy" period and the second globalization period. The business cycle is identified as the series of deviates from a Hodrick-Prescott filtered trend, and turning points are identified. Cross-correlations of the cyclical deviates are calculated for all the pairs of the 21 countries examined. It is apparent from casual inspection that the business cycle characteristics and the pattern of crosscorrelations in the bloc economy period are different from those found for the two globalization periods whilst there is less difference between the two globalization periods. Estimation is undertaken of equations to explain the pattern of cross correlations in terms of trade and currency union membership. A dummy for the countries that belong to the Eurozone is found to be significant for the period of the first globalization, that is, well before any manifestation of a common Euro-currency is available. By contrast, Asian business cycle co-movement cannot be found.
    Date: 2011–10
    Abstract: Using a gravity model, this study examines trade patterns of two isolated economies - Myanmar and North Korea. This study finds that two countries' trade is basically consistent with the prediction of the gravity model. However, economic sanctions toward these countries imposed by the U.S. and other developed countries have distorted their trade pattern, and it turns out that China is exerting its power in place of other santion-participating countries. Relevant policy implications follow.
    Date: 2011–09

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