Emerging Asia’s growth and integration: how autonomous are business cycles?

Arbeitspapier

Against the background of the rapid integration of emerging Asia into the global economy, this paper investigates the role of domestic and external factors in driving individual emerging economies in Asia. We estimate VAR models for ten countries over the period 1979Q1- 2003Q4, controlling for external factors, and use sign restrictions to identify structural domestic shocks. Variance decompositions indicate that Asian emerging economies are to a large part driven by external developments, and even more so employing a more recent sample. We analyse to what extent structural domestic shocks exhibit a regional dimension by comparing shocks across countries using correlation and principal component analysis. The extent of regional co-movement between structural shocks is relatively limited. While the principal components analysis indicates a moderate increase in co-movement over time, the correlation analysis finds a decline. This may reflect a broadening of regional integration at the expense of bilateral economic ties.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 715

Classification and Topics

• Classification: Wirtschaft ; Economic Integration ; International Economic Order and Integration ; Open Economy Macroeconomics
• Subject: Economic integration ; International Business Cycles ; sign restrictions ; structural shocks ; Konjunkturzusammenhang ; Strukturwandel ; Schock ; Regionale Wirtschaftsintegration ; Schwellenländer ; Asien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Rüffer, Rasmus ; Sánchez, Marcelo ; Shen, Jian-Guang
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/153149
• Last update: 10.03.2025, 11:44 AM CET