DIRECT MACROECONOMIC LINKS BETWEEN SELECTED EAST ASIAN ECONOMIES AND THE US? AN EMPIRICAL ANALYSIS

This paper attempts to establish whether there exists any direct macroeconomic linkages between some East Asian (EA) countries on the one hand and the US on the other hand, based upon quarterly real gross domestic product (GDP) series spanning from the early 1990s. Cointegration, Granger causal relations and contemporaneous correlations of output shocks are explored. Contrary to a priori expectations, the empirical evidence suggests no direct linkages of these economies to the US, with the exception of the Malaysian economy. In the case of Malaysia, only a Granger causal relation from the US is found. All this would allude to the ability of these EA economies save one to grow independently of the US, barring a global economic crisis such as the recent one triggered off by sub-prime loans.