Title: An analysis of Asia-Pacific regional integration: time-varying SVAR approach

Authors: Essahbi Essaadi; Awatef Ourir

Addresses: Laboratory QuARG UR17ES26, University of Manouba, ESCT, Campus Universitaire Manouba, 2010, Tunisia ' Laboratory QuARG UR17ES26, University of Jendouba, FSJEG Jendouba. Tunisia

Abstract: Regional economic integration in East and Southeast Asia has reached considerable transformation in a few years. Considering the critical role of trade integration in the integration process, we study whether East and Southeast Asian countries are influenced by specific, regional, or global shocks. The novelty of the paper is that we look after regional integration as an evolutionary process. To detect dynamic changes in the variance decomposition analysis, we apply a time-varying SVAR model. Our main finding is that when we consider the nonlinear aspect of the integration process in East and Southeast Asia, conclusions about its suitability for currency union change completely. TVP-SVAR model is used to revisit the economic integration process in the East and Southeast Asian region. Japan outperforms China and the USA as a regional anchor for most countries in the last dates. The large specific shock brings us to the point that the region is neither a yen nor a yuan nor a dollar block, but is tending towards a yen block.

Keywords: East Asia; Southeast Asia; monetary union; TV-SVAR model.

DOI: 10.1504/IJEBR.2023.127277

International Journal of Economics and Business Research, 2023 Vol.25 No.1, pp.137 - 149

Received: 18 Jan 2021
Accepted: 11 Apr 2021

Published online: 30 Nov 2022 *

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