Is East Asia becoming more interdependent?

Abstract

This paper reviews the evolution of the intensity of interdependence in East Asia. In earlier work (Petri, P. A. 1993. "The East Asian trading bloc: An analytical history," in: Jeffrey A. Frankel, M. K., (Eds.), Regionalism and Rivalry (A National Bureau of Economic Research Conference Report), Chicago: University of Chicago Press, 21-52.), we found that East Asian interdependence, as measured by a gravity-coefficient index, peaked before World War II and then declined until the mid-1980s. We speculated then that the decline would end, leading to a new era of East Asian regional integration. In the event, data extended to 2004 show that the 1980s did represent a turning point, and interdependence has increased since for most countries and also on average. The paper traces possible explanations for this pattern, finding in particular that the drivers of East Asian interdependence have been changing over time. © 2006 Elsevier Inc. All rights reserved.