2020 Fiscal Year Research-status Report
Impacts of tariffs of the US against China on the machinery exports of China and Japan to the US
| Project/Area Number |
20K01642
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| Research Institution | Waseda University |
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Principal Investigator |
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| Project Period (FY) |
2020-04-01 – 2023-03-31
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| Keywords | impact of tariff / system GMM / structural break |
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| Outline of Annual Research Achievements |
I have estimated the demand and supply equations of Japanese machinery exports to the US using the system GMM, which is the basis model for the project. (The xtabond2 codes of STATA was used to implement the estimation.) The period covered is from 2002Q2 to 2018Q3, and the sectors covered are 84, 85 and 87 by the HS code. The findings strongly indicate that estimation results are sensitive to model specifications, warning the impacts of tariffs must be analyzed in adequately specified models.
For example, when the Euro exchange rate is not included in the demand equation, the impact of the price of the Japanese yen on export prices does not show significant structural change before (2002~2008) and after (2012~2018) the global financial crisis. The coefficient is -0.31 before the crisis and -0.38 after the crisis, and both of them are strongly significant. However, if the Euro exchange rate is included as one of the explanatory variables, yen's price turns out to affect Japanese export prices only before the global financial crisis. The coefficient becomes insignificant for the period after the crisis. Meanwhile, the price elasticity in the demand equation is estimated to be reasonable values.
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| Current Status of Research Progress |
Current Status of Research Progress
3: Progress in research has been slightly delayed.
Reason
I planned to present the results of preliminary analyses in international conferences or research seminars. However, due to turbulence caused by the covid 19, I could not actively participate in such events.
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| Strategy for Future Research Activity |
After some more model specification tests, I will proceed to include tariff in the models and estimate the impacts of tariffs on export prices. Since I am now accustomed to zoom meetings, the results will be presented at virtual seminars.
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| Causes of Carryover |
Due to the Covid 19 situation, I could not do research trips and seminar presentations. It is mainly why some budgets are left.
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