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How Elastic is East Asian Demand for Consumption Goods?

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  • Willem Thorbecke

Abstract

This paper investigates import demand in East Asia. Estimating exchange rate elasticities for countries in the region is difficult because many imports are used to produce goods for re-export. An exchange rate appreciation that reduces East Asian exports will also reduce the demand for imported inputs that are used to produce exports. To correct for this bias this paper examines the imports of consumption goods, since these are intended primarily for the domestic market. Results from several specifications indicate that currency appreciations and increases in income in East Asian countries would significantly increase consumption imports.
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  • Willem Thorbecke, 2011. "How Elastic is East Asian Demand for Consumption Goods?," Review of International Economics, Wiley Blackwell, vol. 19(5), pages 950-962, November.
    • Handle: RePEc:bla:reviec:v:19:y:2011:i:5:p:950-962
    DOI: j.1467-9396.2011.00997.x
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    References listed on IDEAS

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    1. Yin-Wong Cheung & Menzie D. Chinn & Eiji Fujii, 2010. "China's Current Account and Exchange Rate," NBER Chapters, in: China's Growing Role in World Trade, pages 231-271, National Bureau of Economic Research, Inc.
    2. repec:zbw:bofitp:2007_006 is not listed on IDEAS
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    Cited by:

    1. Willem Thorbecke, 2011. "The Effect Of Exchange Rate Changes On Trade In East Asia," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 85-102.
    2. Thorbecke, Willem, 2016. "Understanding Chinese consumption goods imports," Journal of Policy Modeling, Elsevier, vol. 38(1), pages 96-102.
    3. THORBECKE, Willem, 2016. "China's Electronics Exports, the Renminbi, and Exchange Rates in Supply Chain Countries," Discussion papers 16088, Research Institute of Economy, Trade and Industry (RIETI).
    4. Thorbecke, Willem, 2019. "East Asian value chains, exchange rates, and regional exchange rate arrangements," Journal of Asian Economics, Elsevier, vol. 65(C).
    5. Thorbecke, Willem, 2011. "Transpacific Imbalances and Macroeconomic Codependency," ADBI Working Papers 299, Asian Development Bank Institute.
    6. Willem Thorbecke, 2015. "Enjoying the Fruits of Their Labor: Redirecting Exports to Asian Consumers," Asian Development Review, MIT Press, vol. 32(2), pages 95-114, September.

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    More about this item

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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