2005 Fiscal Year Final Research Report Summary
The Impact of Real Exchange Rates Changes on Trade Structure of Japan, the United States, and Fast Asia --Positive Analysis using Price Indices of Trade by products--
| Project/Area Number |
15530176
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Economic policy
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| Research Institution | Saitama University |
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Principal Investigator |
NAGATA Masahiro Saitama Univ., Liberal Arts, Professor, 教養学部, 教授 (50261871)
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| Co-Investigator(Kenkyū-buntansha) |
NARITA Junji Aoyama Gakuin Univ., Economics, Professor, 経済学部, 教授 (00133695)
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| Project Period (FY) |
2003 – 2005
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| Keywords | East Asia / real exchange rate / price index / volume index / financial crisis / Japan / United States / intra-firm trade |
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| Research Abstract |
We developed Trade Indices database of 2003-2005. By using these indices, we made a quantitative analysis on capital goods trade among Pacific rim countries.
1.The major source behind the economic recovery in the Asian countries after 1999 was the rapid expansion of their net exports. Their net exports expanded, because the real exchange rates were sustained at a low level thanks to low inflation rates. The current levels of the real exchange rates in many Asian countries are still lowest after the 1980s, which is quite different from the situation after the financial crises of Russia and Latin American countries such as Mexico. In many Asian countries which experienced financial crises, inflation rates keep low in spite of their massive decline of their currencies. The main factor of the low inflation rates was the decline in the expected inflation rates.
2.While China has a big trade surplus of finished capital goods against the United States, it also has a substantial trade deficit of parts against Japan and semi-advanced Asian countries. One of the reasons why the Asian countries have growing trade surplus of capital goods against China is the real exchange rate appreciation of yuan against the East Asian currencies after the Asian currency crisis of 1977, even though it somewhat depreciated against US dollar and yen after the crises.
3.Because many multinational corporations try to avoid regulations of host countries, such as restriction on repatriating their profits, they tend to put different prices from the market prices (transfer pricing) on their intra-firm trade. According to our estimation, the price elasticity of both exports and imports are lower in the intra-firm trade compared with the non intra-firm trade. This shows that the volume of intra-firm trade is less sensitive than that of ordinary trade to the real exchange rate fluctuations.
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Research Products
(7 results)
