MAKING EAST ASIAN REGIONALISM WORKS

  • Fithra Faisal Hastiadi Waseda University
Keywords: Regionalism, Engle-Granger Cointegration, Error Correction Mechanism, Fixed Effect, Two Stage Least Squares

Abstract

For the past few years, regionalism has been progressing in East Asia with the likes of Cina, Japan, and Korea (CJK) as the most prominent actors. Unfortunately, with the absence of trade arrangement amongst the CJK, the present regional trade scheme is not sufficient to reach sustainability. This paper uncovers the inefficient scheme through Engle-Granger Cointegration and Error Correction Mechanism. Moreover, the paper underlines the importance of triangular trade agreement for accelerating the phase of growth in CJK which eventually create a spillover effect to East Asia as a whole. Employing Two Stage Least Squares in a static panel fixed effect model, the paper argues that the spillover effect will function as an impetus for creating region-wide FTA. Furthermore, the paper also identifies a number of economic and political factors that can support the formation of East Asian Regionalism.

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Published
2010-11-22
How to Cite
Hastiadi, F. (2010). MAKING EAST ASIAN REGIONALISM WORKS. Buletin Ekonomi Moneter Dan Perbankan, 13(1), 103-124. https://doi.org/10.21098/bemp.v13i1.386
Section
Articles