Accounting for the economic relationship between Japan and the Asian Tigers

Hirata, Hideaki; Otsu, Keisuke

doi:10.1016/j.jjie.2016.06.001

Cited by 4 publications

(3 citation statements)

References 41 publications

(27 reference statements)

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“…Hirata and Otsu (2011) demonstrate that the efficiency improvement of South Korea and Taiwan has created a positive spillover effect on the Japanese economy since the mid-1980's. For more on the decoupling/recoupling literature, seeBordo and Helbling (2011), Kim, Kose, and Plummer (2003), Kose, Otrok, and Whiteman (2008),Park and Shin (2009).…”

mentioning

confidence: 92%

Examining industrial interdependence between Japan and South Korea: A FAVAR approach

Selover

Yagihashi

2015

Japan and the World Economy

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This paper investigates the economic relationship between Japan and South Korea by incorporating disaggregated output measures. Using a factor-augmented vector autoregression (FAVAR) model, we conduct several experiments to test the nature of the interdependence, both in the aggregate and by sector. We find that South Korean output shocks affect the Japanese economy in a significant manner, whereas Japanese output shocks have a limited effect on South Korea. By further examining the transmission mechanism of sectoral output shocks and comparing them with the direction of sectoral trade, we find evidence of cross-border production sharing, which explains the asymmetric results seen in the aggregate output.

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mentioning

confidence: 92%

Examining industrial interdependence between Japan and South Korea: A FAVAR approach

Selover

Yagihashi

2015

Japan and the World Economy

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“…If there was no increase in markups, counterfactual evidence implies a output recovery. Hirata & Otsu (2011) investigate the economic relationship between Japan and Korea and Taiwan. In a IBCA set up a two-country, two-good model in which the efficiency wedge manifest itself as productivity in intermediates goods output, rather than TFP, implying that a relative price change in intermediate goods can distort production decisions, they conclude that growth in the Asian Tigers productivity generated positive spillover effects on Japanese growth via terms of trade.…”

Section: Developed Economiesmentioning

confidence: 99%

“…Episodes with that nature give more weight to other wedges. For instance, in Bridji (2013), Cho & Doblas-Madrid (2013), Saijo (2008), Sarabia (2007), Sarabia (2008), Simonovska & Söderling (2008), Hirata & Otsu (2011), Lama (2011), the labor wedge explains an important part of short-run fluctuations. Chadha & Warren (2012) and Chakraborty & Otsu (2013) are exceptions, where contagion was present, but instead of the labor wedge capturing movements in data, the investment wedge did.…”

Section: Emerging Marketsmentioning

confidence: 99%

Business cycle accounting: What have we learned so far?

Brinca,

Costa Filho,

Loria

2023

Journal of Economic Surveys

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What drives recessions and expansions? Since it was introduced in 2007, there have been hundreds of business cycle accounting (BCA) exercises, a procedure aimed at identifying classes of models that hold quantitative promise to explain economic fluctuations. This paper contributes with a software—a graphical user interface that allows practitioners to perform BCA exercises with minimal effort—and exemplifies the procedure by studying the U.S. recessions in 1973 and 1990 and reflecting upon the critiques BCA has been subject to. We look into the many equivalence theorems that the literature has produced and that allow BCA practitioners to identify the theories that are quantitatively relevant for the economic period under study. The methodological extensions that have been brought forth since BCA's original inception are addressed as well as conclusions regarding the relative contribution of each wedge: GDP and investment are usually driven by an efficiency wedge, hours worked are closely related to the labor wedge and, in an open economy extension, the investment wedge helps to explain country risk spreads on international bonds. Finally, larger changes in interest rates and currency crises are usually associated with the investment and/or the labor wedge.

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