Interaction Between Trade, Conflict and Cooperation: The Case of Japan and China

39 Pages Posted: 23 Feb 2011

See all articles by Shiro Patrick Armstrong

Shiro Patrick Armstrong

Australian National University (ANU) - Crawford School of Public Policy

Date Written: December 1, 2010

Abstract

The complex interaction between trade and politics is analysed for the Japan-China relationship using Granger causality tests. The purpose is to determine the presence and direction of causation between trade and political events, both positive and negative, and to gauge an idea of the lag length of causality. Trade is growing quickly between Japan and China despite long standing political distance between the two countries. Results show that the economic relationship underpins and constrains the political relationship between Japan and China while an increase in positive political news and a decrease in negative political news promote trade to some degree.

Suggested Citation

Armstrong, Shiro Patrick, Interaction Between Trade, Conflict and Cooperation: The Case of Japan and China (December 1, 2010). Crawford School Asia Pacific Economics Paper No. 386, Available at SSRN: https://ssrn.com/abstract=1767659 or http://dx.doi.org/10.2139/ssrn.1767659

Shiro Patrick Armstrong (Contact Author)

Australian National University (ANU) - Crawford School of Public Policy ( email )

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

HOME PAGE: http://www.crawford.anu.edu.au/staff/sarmstrong.php

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