Economic Interdependence: Evidence from China and ASEAN-5 Countries

Arunnan Balasubramaniam, Chin-Hong Puah, Shazali Abu Mansor

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DOI: 10.4236/me.2012.31017                

Abstract

This study aimed to examine the interdependence relationship among five Association of Southeast Asian Nations (ASEAN-5) countries (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) and China from a business cycles perspective. The Granger non-causality test proposed by [1] was used to examine causal linkages in business cycles. The empirical results indicated common business cycles between China and ASEAN-5 economies. This suggested that China and ASEAN-5 share similar business cycles and could complement each other in the long run. A discussion of important insights for regional economic policy coordination in which similar business cycles provide a platform for common regional trade, as well as suggestions for monetary policies, conclude the paper.

Keywords

Granger Non-Causality Tests; Business Cycles; Time-Series; Economic Integration

Conflicts of Interest

The authors declare no conflicts of interest.

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