Japan is the leading supplier of sophisticated capital goods to East Asian countries. These goods embody advanced technologies and facilitate learning and productivity growth. Capital goods also represent 30%-40% of Japan's exports. This paper investigates the determinants of these exports....

Germany's nominal exchange rate has remained weaker because it is linked to weaker eurozone economies. Germany's real exchange rate also depreciated vis-à-vis eurozone countries after 2000 because German firms and workers controlled unit labor costs. This paper investigates how exchange rate...

China's trade surplus is entirely in processing trade. Processed exports are final goods produced using parts and components coming from East Asian supply chain countries. Many claim that because much of the value added of China's processed exports comes from East Asian countries, exchange rates...

This paper discusses the appropriate policy mix for China in the post crisis period. As is well known, China has achieved a remarkable economic growth rate over the last 30 years using an export-led growth strategy. To implement this strategy, the Chinese authorities have pegged their currency...

This paper investigates whether China's exports to the United States are an outlier. Gravity model results indicate that these exports have exceeded their predicted values by more than $100 billion in every year since 2005, and that both processed exports produced within regional value chains...

China runs surpluses of $400 billion-$500 billion in processing trade. In value-added terms, East Asia as a whole runs surpluses in processing trade with the West. This generates appreciation pressures on exchange rates throughout the region. Using data up to 2012, this paper reports that a...

This paper discusses the appropriate policy mix for China in the post crisis period. As is well known, China has achieved a remarkable economic growth rate over the last 30 years using an export-led growth strategy. To implement this strategy, the Chinese authorities have pegged their currency...

There has been an explosion of parts and components traded within East Asian production networks. China has emerged as the final assembly point for the goods produced. These goods then flow primarily outside of the region. When the Global Financial Crisis (GFC) occurred, the decrease in Western...

Estimating the price elasticity of China's imports is difficult because many imports are used to produce exports and because the real effective exchange rate has remained fairly stable. To circumvent the first problem, we control for re-exports, and to increase the discriminatory power of the...

This paper surveys research on foreign direct investment (FDI) in East Asia. The pattern of FDI in the region has changed over time. Outward FDI from Asia began in earnest when Japanese multinational corporations (MNCs) shifted production to other Asian economies following the 60% appreciation...