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Have US-Japan Trade Agreements Made a Difference?

Author

Listed:
  • Byron Gangnes

    (Department of Economics, University of Hawaii at Manoa)

  • Craig Parsons

    (Department of Economics, Yokohama National University)

Abstract

The few existing empirical studies of U.S.-Japan trade agreements have relied primarily on descriptive statistics or univariate time series methods. We conduct a more powerful test by evaluating agreements in the context of well-specified econometric models. Consistent with trade theory, import demand is modeled as a cointegrating relationship with income and relative price variables, where a trade agreement may cause a structural break in the cointegrating vector. In several cases, we find evidence that market-opening trade agreements may have increased the volume of Japanese imports, while other agreements appear to have had no significant impact.

Suggested Citation

  • Byron Gangnes & Craig Parsons, 2004. "Have US-Japan Trade Agreements Made a Difference?," Working Papers 200403, University of Hawaii at Manoa, Department of Economics.
    • Handle: RePEc:hai:wpaper:200403
    Note: Also Singapore Management University Economics and Statistics Working Paper No. 08-2004, March 2004
    as

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    More about this item

    Keywords

    Structural break test; U.S.-Japan trade agreements; import promotion policies;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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