Trade connections and interest rate linkages among ASEAN, Japan, and the USA: an empirical analysis

Abstract

In the existing literature, there have been only a limited number of efforts at empirically evaluating the degree of economic connections among ASEAN countries. The present study intends to fill this gap. The study is conducted through an investigation of regional trade connections and interest rate linkages. The results indicate that both the degree of trade interdependence and the interest rate linkages among ASEAN nations are comparable to those among EEC and NAFTA countries. Singapore plays a key role in ASEAN economic relations. Different from EEC and NAFTA, ASEAN appears to be heavily dependent on Japan and the USA, the two super economic powers outside the association.