Changing Comparative Advantage,Real Exchange Rate Impact and Sino–Japanese Trade Fluctuations |
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| Authors: | Bin Qiu Feifei Wu Baoqing Tang Xiuyan Liu |
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| Affiliation: | 1. Professor, School of Economics and Management, Southeast University, China;2. PhD candidate, School of Economics and Management, Southeast University, China;3. Associate Professor, School of International Economics and Business, Nanjing University of Finance and Economics, China;4. Associate Professor, School of Economics and Management, Southeast University, China |
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| Abstract: | China, as an important source country in the global value chain, especially in the East Asian production networks, has exerted significant influence on Sino–Japanese trade fluctuations. This paper explores the real factors that lead to the fluctuations in Sino–Japanese trade. Using the Hodrick–Prescott filter technique and OECD–WTO Statistics on Trade in Value Added from 1995 to 2011, the impact of the changing comparative advantage between the two countries is also examined. The empirical results indicate that determinants of the fluctuations in Sino–Japapese trade include changing comparative advantages, the volatility of the real exchange rate and quite a few external shocks. Some policy suggestions are put forward in regards to the stability of trade between the two countries. |
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| Keywords: | comparative advantage real exchange rate trade fluctuation E32 F14 F17 |
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